To that end, Figure 1:

The Dungeon Master sits at one end of table to gain a good view of all the players and the shared space in the middle. Before the DM sit notes for the evening's session, and a copy of the most frequently consulted rules.
The Players sit around the table so that each has a good view of the DM and the shared space. Each player has a character sheet. The character sheet is a double-sided page containing all the essential information needed to run a player character. Players also have access to the rules they expect to consult.
In between the DM and the Players lies the shared space. I like to fill that space with a map, battle mat, or dungeon tiles, as well as minis or tokens for the PCs, NPCs, and monsters. While such accessories are not obligatory, I find that they help keep player attention focused on the shared space. Maps and minis also allow the DM to spend more time embellishing the scene, rather than disambiguating it.
(Not pictured: scratch paper, dice, nachos, additional books for less frequently referenced rules.)
Ideally, this setup encourages the sort of exchanges seen in Figure 2:

DM Narration sets the scene for the players, establishing elements (for example, dungeons, or dragons) with which they can interact. Party Feedback tells the DM how the players want to interact with those elements (explore, fight). Party feedback informs the next iteration of DM narration, which generates more party feedback, and so forth.
DM/Player Interaction includes both in-character conversations (as between an NPC and a PC) and out-of-character conversations (as when asking for a ruling on some game mechanic). In my experience, the majority of Player/Player Interaction is out-of-charactercter negotiation as a precursor to Party Feedback. However, in my ideal game, player/player interaction would also include a fair amount of in-character conversation, or even P1 narration/P2 feedback.
Which is all a very long-winded way of saying: A bunch of friends equipped with basic materials sit around a table and entertain each other by talking about dungeons and dragons (or even Dungeons & Dragons) for a couple hours. As long as I can pull back now and then and look at that as the game, I'll probably save myself a lot of angst over mechanical minutiae.
