Tile looks best if it's laid out in a straight line and square to the walls. That requires a bit of thought prior to installation.
In a perfect world, all walls would be straight and square. Unfortunately this is not usually the case. Everyone will need to evaluate their own circumstances to determine the best layout for their tile floor.
Establishing Reference Lines
If you have one wall that is definitely more visible than the others, you want your tile to be square to this wall. Snap a chalkline or draw a line out 90 degrees from the center of this wall to the opposite wall.
Next, find the center of this line and draw a line perpendicular to it that runs into the remaining two walls. Double check that these lines are perfectly square; these are your starting reference lines.
If your walls are all equally visible, draw lines between the midpoints of the room's opposing walls. This should give you two perpendicular lines crossing at the center point of the room. These 90 degree reference lines are the key to a good layout.
Testing the Layout
Test-fit a row of tiles along each reference line to see how they lay out. Be sure to account for the thickness of the grout lines.
Check the size of the tiles at the end of the rows. If they end up being less than half their original size you should shift the row either way half a tile's width.
If both ends of a row are visible, you'll want the end tiles to be the same size. If only one end of a row is visible you'll probably want to start there with full tiles. Smaller cut tiles can be hid behind doors or under cabinets.
New Reference Lines
Snap or draw new reference lines to accommodate the adjusted layout. Again, make sure these lines are square.
Laying Out Sections
While professional tile setters may only need a couple of reference lines to set tiles evenly, for do-it-yourselfers the more lines the better. Laying out sections, or a grid pattern, will help you keep the tile straight and square. You'll also find that it's easier to work at one small section at a time when setting tile.
From the intersection of your new reference lines, lay out a small section of tiles (about 2 or 3 square feet). Use tile spacers or leave enough room for the grout lines.
Measure this section, then draw a grid of lines across your whole floor based on these measurements. The sections against the walls may not be full sections; this is ok.
TIP: If you're mixing tile colors or shapes, make sure your sections are big enough to include the whole pattern you'll be repeating.
Now you can set your tile one section at a time and maintain your straight lines.