I have touched on this before, but now I have a picture!
Sometimes: If the jacket lapel lies flat against the chest, then button the button. If the lapel rolls over the button, like in the picture, don’t button it.
Always: Button the middle (top for two button suit) button. The only exception is when you are sitting down. Always unbutton your jacket when sitting (unless it is double-breasted)
Never: button the bottom button. A bit of history: According to legend, in the early 1900’s, King Edward VII started the trend of leaving the bottom button on his suit undone. This is attributed to the fact that he grew too large to button it. In order to not offend the King, those around him started doing the same, and it quickly spread. Now, suits are designed so that the bottom button cannot be buttoned without severely affecting the way the jacket naturally hangs.
I highly recommend printing out this picture, and handing out copies on the street corner, but that’s just me.
As for unbuttoning your suit when you sit, well, if your suit fits you properly, then it should become far too tight to leave buttoned when sitting.