For the vast majority of the observation period, I spent my time sitting on a stool at a tall table at the end of the information desk. From this spot, I would intrude little on reference interactions nor make users nervous by noticeably watching them. The drawback was that I could rarely hear everything that was being said. So I merely focused primarily on recording non-verbal behavior.
An added benefit of this spot was that I was not seeing things from either the customer's viewpoint or from the librarian's. Rather, I was in a relatively neutral position, looking down the middle of the information desk counter. Also, I had an unobstructed view of the main entrance, which made for good people watching during slow times at the desk.
During my observation times, I took notes on anything of interest and jotted down any ideas as they came to me. Thus, this report is not very controlled or strictly empirical in its findings. But it may still be of interest and serve as a good basis for further study if need be.