On a final project of residential automation, where should I put my Arduino?

At a minimum you'll need to make sure that all your low-voltage Arduino related stuff is physically isolated from the 'real' high-voltage mains stuff, and mounted into its own separate box.
Then, depending on where in the world you are, you'll probably also need to ensure that any connections you make to the mains are through 'listed' modules - for example relays like these.
Wiring mains directly into your own home-brew electronics is likely to be against the electrical code in force wherever you are, and will almost certainly void your insurance coverage if it's found to be the cause of a fire.