Mark,
I agree with what most everyone else has said, but have a couple of things to add. ACAD is unitless as described above. If you draw a line with a length of "1" it will be 1 unit long. The type of unit is set by you (the user) in your drawing setup, which affects plotting and measure-type commands. I agree with Jerry about always drawing at full scale (I think of it as "real world" scale). But it IS important to think about what scale you will plot at (i.e., 1" = 100', etc.) before you begin drawing for at least one very good reason. If you will add text to your drawing, in the same file you are drawing your linework in, you will have to set up your text so that it will look right when you plot. For example, the standard text height at my company for general text is 0.1 inches when plotted. Let's say I'm drawing a plan view of my house, including my lot. Let's say my lot is 150'x300' (it is actually much, much smaller

). Anyway, I want to plot it on a 24"x36" sheet, so after subtracting space for the border, I end up with about 33" of useable width. So I've got to fit 300' within 33" of paper. Thus, I need a scale of 1" = 10'. In my drawing, I draw at real world scale (my units are set for feet), my linetype scale is set at 10 (for a scale of 1/10), and my general text height is set for 1" height. Now, I insert some text in some leaders, dimensions strings, etc. Now when I PLOT, I plot the file at a scale of 1 to 10 and my plotted text height is 0.1 inches (also, my hidden and other non-continuous linetypes look right). Does that make since?
Okay, here's another thing. I see alot of people draw a scaled-up border, and that's fine. I prefer to draw my border in a seperate file in paper space at full scale, then draw my line work in model space and use a viewport. Then, rather than actually scaling the drawing for plotting, you zoom within your viewport to get it at the scale you need. Actually, I don't even put my linework in the same drawing file as my border. I actually do my linework in a seperate drawing (in model space), then xref my border into paper space. If you don't use model space/paper space I may have just lost you, but it works the same if everything is done in model space. If you only work in model space, I'd xref my linework drawing into my border drawing (you have to scale the xref). Man, this would be alot easier if we were both sitting in front of the same computer with ACAD open. Anyway, the point is this...regardless of which technique you use, if you are going to have text in your drawing, be it labels or only in the border, you need to know what the final plot scale will be and set up your text heights accordingly or you may end up having to redo alot of text (yes, I have learned this the hard way after deciding I needed to change the scale of my drawing after I had done all of my labeling). The key here is always think ahead and plan your final product before you start drawing lines on paper (so to speak).
One other thing....
I usually draw everything in decimal feet, so if I measure a line and ACAD returns a value of 323.25, I know it is 323.25 feet long; however, when drawing details, structural drawings, etc., I often need my units to be in feet and inches. In this case, you have to set things up a little differently. I end up drawing in inches rather than feet, so if I measure a line that is 12 units long, I know that it is 12" (one foot). This is important when using the dimensioning commands, offset command, etc.. The only bad thing about architectural units is roundoff error and figuring out the scaling factors for plotting as described above.
Well, I didn't mean to ramble on so long. Good luck, and I hope this helped!