The rods should be out on the wall 6" to 8" on each side. This allows you to have your panels partly on the wall, partly over the glass. It makes the window look wider, does not obstruct your view, and softens that hard vertical line.

The rod can be placed anywhere between the top of the frame and the ceiling or crown moulding. Installing it higher accentuates your 9' ceilings. But having it on the frame, does not add another horizontal line. If you have a valance that fills in the space between the rod and the top of the window, you can go higher.
It's nice to find a natural "line".
It's really a matter of taste!

Thank you thiamom!