I have 2 juco recruits I'm about to sign, both will be starters. I'm not sure which will fit in better considering their attributes, hoping for a little help. Want to get the lineup right for my exhibition.

I got one player whose stats are as followed:

(Labeled a PF)
ATH: 62
SPEED: 41
REBOUND: 49
DEF: 56
BLOCK: 56
POST: 27
PER:6
BALL HAND:46
PASS:36
WORK ETHIC: 56
STAM: 60
DUR: 57


(Labeled a Center)
ATH: 22
SPEED: 27
REB: 75
DEF:29
BLOCK: 74
POST: 51
PER: 35
HAND: 26
PASS: 10
WORK ETHIC: 81
STAM: 64
DUR: 50

Do I want to leave them in the positions they are in, or should I put the (labeled center) guy at PF?

Also, do stats improve based on practice time only? Or does game-time help improve also, I want to get the (labeled center) player the most use of out his work ethic, trying to get all I can get out of him since he only has 2 years left.

Forget about the listed positions.  Put players where you think their skills fit.  That said...

Guy #1 doesn't really have a position.  You can put him at PF, but he's not going to rebound much.  His ATH will help a little, but he's probably not what you have in mind when you picture a PF.  You could put him at SF, but he's slow for that position and you'd prefer his BH/Pass to be higher.  Most guards would be a better choice if you're not desperate for rebounding.

Guy #2 just sucks, and won't be able to play defense at all even at D3.  His position should be... well, he's not gonna help.

Game time is the most important thing to getting improvement. With your Center, and only 2 years left, it's good that he has such a high work ethic. I run a M2M defense and often I will use my PF and C interchangeably for defensive matchups. With your 2, the PF being clearly the better defender, you could match him up against the better offensive big man for the other team. However, If you'd like to put them in there and keep them at one position, I'd keep the C at C and the PF at PF.

You need to recruit better ATH and DEF, they're the most important attributes in the game.  I highly recommend you read Aejones' "How to win at DII and DIII" if you want to be successful in this game.  Here's the link: http://whatifsports.com/forums/Posts.aspx?TopicID=453763&Page=1

In your man-to-man keep them both at their labeled position. Your center could never guard an average PF.