Also, once you press L1 and R1 to scroll through your characters, you have to press O to put them down. Press X to remove them from the battlefield. I don't remember exactly, but I think you can press O to partially lift a character off of the battlefield to put them somewhere else.

If in doubt, put your generic units in the best places first and then put Ramza wherever, because in many story battles Ramza has a set position, usually a little away from where you put the rest of your units.