When I decorate the stand-up house, do I decorate it laying down (the cake, not me!) and then stand it up and do the back?

And will this thing really stand up on its own???

I would build it/construct the cake the way you intend to serve it.

I've done it both ways. On the cake standing up. And laying flat to do the front and top then stand it up. I find (for me) it works better to decorate the front with it laying flat on it's back. And as much of the sides and top as you can in that position as well. Let it crust over, then stand it up to frost the back. It does need to be supported with dowel's if you are standing it on another cake, but yes, it really does stand up. I have done 3 or 4 of them so far in my short years of decorating. i think a couple of them are even in my photos.

edit, I only have one in my photos. I'll have to upload the church one. The only one in there is the care bear christmas cake using the house pan....