Before purchasing a peep-hole from your local hardware store, check for clarity and the range of visibility it allows. Where you position it must be determined by the height of those most likely to use it.
Keep in mind that people who knock on the door may stand in a certain place because of a fly screen or other object, so position the peep-hole opposite this point.
The device consists of two parts which screw into each other; all that is required is that a hole of a suitable diameter be drilled through the door. When drilling a ply-faced door, make sure you come in from both sides. Should you come in from one side only there is a chance that the ply could break out on the opposite side. Once drilling is complete, screw the peep-hole in place.