sh8888 wrote: or does the "best" formation depend upon which positions your best/better players play at ?

yes
The long answer: every established team plays a different formation based on their players. However most teams have 3 receivers(Wide Receiver/Tight end) on the offense and just 2 cornerbacks and 1 safety(or at the very most 2) on the defense.

Yomansup wrote: what about running backs?

It doesnt matter much if you play 2 fbs or 2 Hbs or 1 each. But if you have a RB way better than the other you might want to ensure your better RB gets most carries by either playing the other RB as a Fb for the better RB or by just playing 1 RB or by running to one side

In the higher /pass-only leagues, using your RB as a FB might be a better idea since the admins seemed to suggest FB block better but I dont think anyone has been able to prove or disprove that empirically.
(I dont know if the admin meant FBs should be trained to block )

sh8888 wrote: just one Safety ?? (try that against Calvin Johnson )

Most American Football offenses will kill you but GI offenses play better when you have more pass defenders

Receivers just have to break 2 tackles to get into the end zone.
1 by LB/CB
2 by SF/MLB

So the defensive philosophy is to put as few players at those positions as possible to prevent bad matchups.