If you have a tripod, put the mic on it in the main listening position. If you're really ambitious move your sofa out of the way. If you don't have a tripod, you can put the mic on the back of your sofa; it's not the best solution, but it will do a decent job in many cases.
After the first round of test tones some auto setup systems will ask you to move the mic to additional positions in the room. This is usually to optimize the sound quality for multiple seating positions.
If your receiver offers auto equalization (such as Audyssey), you may have to "turn on" that feature for it to be activated. Auto equalization may or may not actually improve your sound quality, so it's worth experimenting to see what you like better.
When you're done, just unplug the mic. Your receiver should be setup properly for surround sound in your room.
If you're at all technically inclined you might want to forgo the auto setup and tackle manual speaker setup. It's not all that difficult, but you should use a sound pressure level meter, such as a Radio Shack 33-4050. You'll probably do a better job yourself than the auto setup.