The coulter should run 3/8" to 5/8' towards the land side. (Away from the moldboard) If the plow happens to have coverboards, set coulters as much as 1" towards land side. Depth is 2" to 4" deep when plow is in the ground. Competitive "match plowing" set-ups usually have the coulter running as deep as the plow to give smooth furrow wall (for appearances)
Look back through the archives in "Attachments". I did a post last winter titled "Plowing New Ground". There's a good bit on plow set-up in there. I'm hoping to do part II this fall and winter with a good bit on actual plowing techniques.
If you need more info, post again. I'll put a few pictures showing recommended coulter settings according to Ford, Massey Ferguson, and John Deere manuals.