The right ceiling medallion is as much about size as it is about style. After you've picked out a piece that won't look too ornate or too simple next to your room's other moldings—or the light fixture that will hang from it—buy it in a size that is in proportion to the room. A good rule of thumb is to divide the square footage of your room by 7 to get a rough diameter for your medallion.
But there are other factors to take into account. A medallion should be about the same diameter as the light fixture that will hang under it, but it can be smaller than a fan. A room with high ceilings can support a larger medallion because it will look well proportioned from farther away. Test different sizes by taping cardboard cutouts to your ceiling and standing back to see how each looks.
Most medallions on the market are polyurethane foam, even those labeled "plaster." (You have to read the fine print to discover that they are not, in fact, real plaster.) Foam medallions go up quickly and simply, with adhesive caulk and some finish screws. But beware: If you do have a real plaster medallion, this installation will not work because the plaster is too heavy for the adhesive caulk.
Traditionally, medallions pair with a chandelier. Their original purpose was to protect the ceiling from candle burns. To install one with a light fixture, the medallion must have a hole in the middle to allow access to the electrical wiring in the ceiling. The hole should be large enough to let you get at the entire junction box but small enough that the decorative plate, or canopy, of the light fixture will hide it. Some medallions come with the hole, but if yours doesn't already have one you can cut one with a drywall saw. You may also have to get a longer threaded nipple, the bolt from which the fixture hangs, to clear the thickness of the medallion. Then, once the medallion itself is prepped and the electrical hookup is ready to go, installing it is a simple matter of sticking it to the ceiling and connecting the light.