I would say typically you would want to leave approx. 3 in. on either side. As far as how high above the window...that would depend on the length of the panel and personal preference. With tab tops, you want to make sure the bottom of the tabs sit a little higher than the top of the window. Also, if you are using sheers, you wouldn't want to go too far out b/c you will be able to see the wall behind them and it could end up looking funny. Otherwise you can extend them further to make the window look larger, as mentioned above. Good luck!

I've placed mine straight, not angled. How far down the wall is prob gonna get the most different opinions, but for me, I look at the distance between the curtain rod and the windowsill and and go about two-thirds down. Some people like the holdbacks smack dab in the middle, tho. I also make sure that the holdbacks are in a spot where they can't be seen if the curtains are completely drawn. But that's just my preference. Sometimes that means I draw the curtain rod out a little longer on each side.

Can you take a pix? In the meantime, does the bed have a headboard? How high above the window are the panels hung? You said "they'll be holding back...". Are the drapes not yet hung? No way to be sure how it will look until you see the drapery up - you should place the tiebacks after you hang the drapes.

You don't have room for panels. Think of something else. Sheers? Roman shade?