When should you listen to hypnosis CDs? That's really up to the individual, though I would caution against listening to them right before you fall asleep at night. Why? Because you run the risk of conditioning yourself to fall asleep whenever you go into trance. Should you wish to listen to your hypnosis CD at other times of the day, or ever choose to visit a hypnotist or hypnotherapist, you wouldn't want to fall asleep after entering the state of hypnosis. The deeper you are in sleep the less effective suggestions are to your subconscious. You really want to be awake for hypnosis to be a success.
What about a hypnosis CD for insomnia? If the tape or CD is meant to be listened to right before sleeping, obviously that's what you would do. However, I would purchase an insomnia hypnosis CD which is meant to be listened to during the day, with suggestions about falling asleep when it's bedtime. I would never get in the habit of listening to a hypnosis CD while I was falling asleep.
As for the right time of day to listen to your hypnosis CD, choose a time for you that will be quiet and uninterrupted. And, remember to unplug the phone.
Should you be seated or lying down during hypnosis? Avoid completely lying down as that might promote sleep. Some choose to use a recliner which leans back, but where you're not completely lying down. I always sit upright in a chair and find that works well for me.