Rear OEM style coilovers
 

I installed coilovers yesterday and everything went well. Overall, it was easier than changing springs. The front was straight forward. I had to adjust height 3 times to get it where I wanted, but it was very simple, just tedious to deal with raising\lower, dismount\mount wheels.

On the rear. I set the height using the threaded spacer on top of the spring. I used a floor jack to raise the spring bucket until there was just enough preload on the spring to keep it from moving around. With the spring under preload, I installed the shock so that when fully extended, it would hold this preload. Basically, adjusted the length until the bottom bolt slid through the hole easily and then tightened the lock ring. I then used the floor jack to compress the suspension until the car was about to lift off the jack stand. I figure this would be the same as the car sitting on the wheels. With the suspension compressed, I tightened the bolts, let the jack down, installed wheels and checked height. Repeat until the ride height is where I wanted it.

Is this correct for setting up the rear?

you need to take it into a shop to get the car corner weighted... that would be the "correct" way to adjust the heights.

wait, are you just talking about just mounting the springs? if so, yes, you want to load the arms with vehicle weight before you tighten the fasteners.

The place I'm most unsure about is how to set the shock length. I set it so that it holds a light preload on the spring, not really compressed, but tight enough that the spring doesn't move. So after assembly, if the suspension hangs free, there is still preload on the spring.

yah, unless it comes with helper springs you will want to set the spring seat so that there is slight preload at full extension of the suspension travel to prevent spring rattle.