I have 100" 4:3 and sit about 9 feet away, it is a little grainy at times, but any one who says size doesn't matter hasn't used anything large before :)
Ditto. Have a 55" rear projection Mitsubishi -- as long as you're at least 9' away, you're fine (of course, you have to adjust for my aging eyes so this might be age dependent). Wouldn't suggest much more than a 40-45 degree angle though. This is not HD, so you can get closer with that (provided the source accommodates).
Placing your seat 1.5-2X screen widths works well for scaled DVDs. Personally, I'd try for something in the 6' wide (80" 16:9 diagonal) range.
I'm currently running a 6' wide screen with seating 12 feet back, and find it a bit small at more than 11 feet and a bit soft at 9 feet so I'll end up with a 7' 16:9 screen when I move the projector to the ceiling.
With 4:3 source coming from DBS, VHS, etc. the smaller 4:3 image is a positive feature.