Workplace Ergonomics, Chapter 2

What is proper keyboard placement?
Keyboards should be located to allow a comfortable, neutral posture during use. This is typically considered to be directly in front of you, at seated elbow height. Proper keyboard placement assists in keeping a neutral keyboarding posture which is generally stated as: shoulders back and relaxed; the upper arms resting down, to the side of your body; the elbows making an approximate 90 degree bend; the forearms horizontal, parallel to the floor; and the wrists being in-line with the forearms with minimal bending up or down, left or right.
Placement of the keyboard to the side results in twisting, awkward postures, and uneven loading on the body. A keyboard too high or low contributes to poor posture of the shoulders, arms, and hands and should be avoided for frequent keyboard use.
More recent research at Cornell University has indicated that a slight backward tilt of the keyboard, to level the keys, is beneficial for wrist posture while typing. Thus, in general, the keyboard surface should be as flat as possible. The University of California, San Francisco and Berkeley's Ergonomics Lab is also conducting research into keyboard design issues.
Related to keyboard positioning, the pointing device (mouse, trackball, etc.) should be located as close to the keyboard as possible and at the same height. Having a keyboard positioned in a tray without enough room for a mouse has frequently resulted in high, far reaches which should be avoided.