I always hold them down at my sides. In my opinion there is no point to having them up on your shoulders since if I wanted to do that I'd just use a barbell.
I use BB's for wide stance, PL-style squatting, but for narrow stance I'm unable to do this because I would fall over with the weight on my back! (shitty biomechanics) This is why I first started doing squats with DB's.
I haven't tried 1-legged DB Squats/Deads yet. Now that must be a brutal oblique exercise if ever there was one.
I have found that using DBs for squats makes for the most brutal total body exercise imaginable. The added element of having to maintain upper body posture with isometric contraction throughout the ROM really makes this as brutal an exercise as they come. It is a great alternative to front BB Squats, a total quad-killer (when done strictly, as noted above). And naturally, the added grip work has a huge carryover to your BB deads.
Use them on your speed day and treat them as an extreme form of GPP conditioning training (or quad development, if your training is more bodybuilding orientated).
Hope that a few people will be inspired to go out and try these. I'd love to know what you think!