So, what is the correct way to set a table? It depends entirely upon what you're serving and the style of service. Buffet or sit-down? Multi-course or family style? Will there be cocktails and snacks? Barbecue or picnic?
Ultimately, you need to make sure there are enough plates, cups, napkins, and utensils for everyone. At a buffet, I plan on 1-1/2 times the number of people. Guests drop utensils or throw away plates before realizing they want seconds. At a sit-down, there ought to be utensils for every course. Set it so the guests work from the outside in. Traditionally, dessert spoons and forks go at the top of the plate, so they are out of the way until you need them. I'm not a fan of charger plates; all they do is help you space the utensils and keep guests from dropping things on the actual dinner plates before the food arrives. I would only use them for a very formal dinner, when you plate everything in the kitchen.
For fun, I looked at the two etiquette books in my cookbook cabinet. I should read them for real; 1950's etiquette is hysterically antiquated, but at least you don't have to deal with people checking Facebook during a proper dinner party. The Amy Vanderbilt Complete Book of Etiquette is the classic book of manners. A lot of it is outdated, even with the 1978 revisions, but it has some great sketches of how to set a table and the proper way to honor guests through seating arrangements. The Random House Book of Etiquette wasn't quite as useful, but does address basic pleasantries and how to be a good host and guest. There are dozens of books on napkin folding; this is the one I happen to own, titled Napkin Folds: Beautifully Styled Napkins for Every Occasion.
Of course, there is always this more recent etiquette lesson:
I have always erred on the side of formality when preparing a table, except that I'm not terribly fond of centerpieces. I like Amy Vanderbilt's idea of investing in a glass, silk, or beaded arrangement that works with everything, rather than struggling to create a new piece for every party. Of course, there's still that folded-up football crepe centerpiece that makes it out once a year for Superbowl. It's all about knowing your guests.