Altars stood outdoors, in front of temples, the main focus of ritual was therefore not inside the temple which served mainly as the 'house' of the god.
The details of the ritual and the type of animal sacrificed varied from one ritual to another. There were rules about the appearance of the animal - it had to be unblemished - and it was adorned before being led to the altar. The animal was also supposed to go willingly, any struggle was an unlucky omen.
There are detailed accounts of sacrifices in the Iliad and the Parthenon frieze represents animals being led to the altar. The idea of the failed or perverted sacrifice features in several myths like that of Tantalus or Minos.
Some scholars suggest that the ritual of sacrifice has its origins in a community's feelings of guilt or unease about killing animals for food. Certainly ritualised guilt played a prominent part in one Athenian ritual: at the Bouphonia ('killing of the ox') a mock trial was held after the sacrifice to establish responsibility for the ox's death, eventually the knife used to butcher the carcass is blamed and thrown into the sea.
Some myths also contain suggestions of human sacrifice e.g. the deaths of Iphigeneia and Polyxena. In the Iliad Achilles kills Trojan prisoners at the funeral pyre of Patroclus. In other cases, human sacrifice is something associated with marginal places, like the bloodthirsty cult of Artemis in Tauris in Euripides' Iphigeneia in Tauris.
Perseus Project Large Animal Sacrifice (with links to their other entries on sacrifice)