When sitting, I use what I call a 'modified classical' position similar to what's described above. I think if I called it 'classical' I'd be hung out to dry. :D I started playing this way 'cause I found that my reach was much better and, as stated above, my posture was improved. It's a more comfortable position for me and that's the point...find what is comfortable. Don't develop bad habits but don't think you must play/hold the guitar in one particular position, either.

See this thread for a discussion about playing positions; http://www.guitartricks.com/forum/showthread.php?t=40291