Cartography is about rules and aesthetics, there are lot of books and material on correct labelling. But these rules are not sacrosanct, they can be changed depending upon map type, terrain, scale and so many other parameters. You can use Maplex in ArcGIS with various settings, like fast, best etc. to see how the placement of the labels changes.
I will try to find some good resource for labelling rules. You can also see on Avenza Mapublisher with Labelpro documentation, which is one of the industry best labelling engine for GIS data driven maps.
Anu http://www.mapsandlocations.com
