How do you decide how high to set dbs. for 5.1 ?

I think that the THX reference level is 85 dB using the C weighting scale on a normal sound level meter using a pink noise tone generator. That, though, is really quite loud, so a lot of people will go 10 dB down from that to 75 dB.
That said, you'll want to go with what sounds right to you, and balance the levels such that they're pretty even across the soundfield. Most newer receivers have auto setup functions to do this for you, but you may want to tweak after the auto settings are done.