There are several ways of setting a gemstone into a ring; the main purpose of a ring setting is to hold the gemstone securely. However, the setting is also designed to allow the light to show off the stone to maximum effect: the light will reflect off the stone and refraction will allow light to pass through the stone.
Which is then right setting? There is really no right or wrong to this question. The setting is very much a case of personal preference.
Here is a selection of the most popular ring settings: