1. The Megillah may be read while standing or sitting. Both the person reading it and those listening may sit without hesitation. However a Reader for the public must stand in honor of the community (Shulchan Aruch and Mishnah Berurah 690).
2. The person reciting the blessings over the reading of the Megillah is required to stand while reciting them. The people listening should also be standing (Mishnah Berurah and Sha’ar Hatzion). Some say that listeners are not required to stand as the blessings are being recited. Some further say that a person who will be reading the Megillah privately in his home also recites the blessings while seated (see Kaf HaChaimad loc.).
