I did it simply in my living room laying face down on a big microfiber towel. It wont attract dust just wipe it down really really good beforehand. Have it under some very good lighting and wipe away every trace of dust and fingerprints - then apply instantly after.
I have one on the front and back it's damn near perfect, the front skin will be temporary as im going to get a PS Anti Glare soon. The back is nice has held up well.
What kind of skin did you get? I have a Gelaskin for my iPod, and the perforations on the design skin itself really help ease out any air bubbles, and it's re-positionable (to a point). In general, before applying a skin, clean the device with a microfiber cloth and/or with denatured alcohol.