Horizontal; get the sheets as long as possible (not the 2.4 meter sheets from hardware stores, they are available up to 6 meters long from a
plasterboard place) so you don't have butt joins in the wall. The side with the recessed edges goes out - the recessed edge is there to help you do the join.
See Rod's two sites (link above) for more info on plastering, he seems to know a bit about it!