I proposed to my wife on Halloween, one of her favorite holidays. We have a ceramic candy bowl with a hand reaching out of it, and I put the ring on the hand and asked her if she wanted any candy. It worked out pretty well
My advice is to make it memorable and unique, but PRIVATE. No need for an audience.
As for money for a ring, the rule of thumb is 2 months salary, and I spent about that much, if not a little more. I went in thinking $4,000 and ended up paying $6,000, so expect to pay more than you have budgeted in your head. I played world of WoW for an entire summer instead of going out with my friends just to save up the money.
The ring itself: Size DOESN'T matter. You can get big diamonds cheap when they look like crap. My diamond was a little under a carat, but it was colorless to the human and and the cut was amazing. It made me squint in the sun. The setting is very important as well, as there is nothing more silly looking than a great diamond on a bland ring, and make sure your setting fits the diamond and isn't out of proportion either way.
Here are my ranks of importance in a diamond:
5. Size (any size .5 carats and up and your fine. I wouldn't go lower unless you're planning to replace it eventually)
4. Clarity (low number on inclusions)
3. Color (colorless as possible)
2. Setting
1. Cut (brilliance)