Pick the right size and shape room. Bigger rooms require more amplification, and can have problems with echoes. In small rooms, echoes aren't as much of a problem, but feedback between your speakers and your microphone can be. The shape of the room can also affect things. Rooms with complex shapes involving split levels or hidden nooks and crannies are likely to have muddy sound.
Adjust the furniture. Anything soft in the room will absorb sound. Sofas, chairs, carpet and tapestries can all dampen echoes and cut high-frequency overtones. If a room sounds too echoey, try hanging a tapestry about a foot in front of the rear wall to stop the sound from vibrating off of it. If the sound is too muffled, try removing furniture from the room.
Adjust the angle of the speakers. Most of the sound shoots in an arc from the front of the speakers, bouncing off whatever it encounters. By adjusting the angle of the speakers, you can control where the sound goes. You can also often eliminate feedback by making sure the speakers aren't facing toward the microphone.
Adjust the volume and dynamics. Most PA systems will allow you to adjust the treble, bass and middle tones independently. You can increase the "body" of the sounds by raising the middle or lower registers, or increase the clarity by increasing the higher frequencies.
Change the type of microphone used. Unidirectional mics are good at absorbing sound from one particular source, such as a speaker or singer, and cut down on background noise. On the other end of the spectrum are omnidirectional mics, which pick up sound from all around. These are great for picking up a whole band at once without having to mic every single person. The material the mic is made from also affects the sound.
Change the distance of each individual from the mic. If you are using one or a few omnidirectional mics to pick up a whole band, for example, you can have the soloist simply step up to the mic when he takes his solo and step away again when it is done. You can also put louder instruments, such as percussion, in the back, farthest from the mics.