We always put the tree centered in the front window. It looks so pretty there from both inside and outside the house. This was the first year we've actually had the front room (living/dining room) fully furnished. In past years we've only had the dining set. This year we had a couch, low bookcases that run the length of one wall, china cabinet and dining set, so it was a bit trickier.
I actually LOVE how we set it up though and we are thinking we will keep this arrangement even after the tree is down (replacing the tree with the play kitchen youngest ds is getting for Christmas). We have no need for a formal living room so ours is set up as a "quiet" play room with all the kids books, board games, and the toys they like to sit and play with for a long while (legos, beads) etc.