How do I set up a Glowing Mushroom farm in Terraria?

I'm aware of the general mechanism of mushroom growing (place some mud and sprinkle mushroom seeds on it). However, I'd like to know a bit more about it before I start building my farm, so I'd appreciate it if anyone could give me the lowdown.

Specifically:

• How deep down exactly do I have to go to grow mushroom grass? I've heard "0ft or lower", "when the background changes to dirt with rocks in" and "when the music changes". These all seem to be different points for me, so which is it? Is it maybe different for large/small worlds?
• Can I place background walls to keep monsters out, or will that stop the grass or the mushrooms from growing?
• How much vertical space should I give the shrooms? Is it possible for the big tree-like mushrooms to grow, given enough space?
• Is water required at all?

• The depth meter is the easiest thing to use to figure this out, but at the end of the day all these things do coincide with each other but instead of there being a graphical straight line, the background varies a little and the music fades pretty well.
• Walls can be placed with out hindering growth of the mushrooms.
• Big mushrooms are possible, I have just not seen them personally.
• No water is needed for this farm.

Hope this helps!

I've made such Farm myself. So I can answer your question.

• How deep down? Glowing mushrooms will grow on depth 2ft or below. I was unable to grow them on 0 depth. Background and music don't matter. Use Depth meter. Also I can point you that you can destroy walls at 0 ft depth and above with dynamite or axe. Then sky will be observed. Background below 0 ft is destructible. But you can place there walls blocks.

  Is it maybe different for large/small worlds?

  No, there isn't difference.

  These all seem to be different points for me, so which is it?

  The only one thing you must concern is depth. Others are consequences of current players depth. For example, usually music changes somewhere at 10-20 ft below.

• background walls. There are no difference between growing mushrooms with walls or without walls.

• vertical space. For small mushrooms it is needed 1 tile of free vertical space. About big mushrooms I can't say anything. But it seems that they need 15 tiles of free vertical space (as for trees). And I think a little horizontal space. Something like 3-4 tiles.

• water No. You needn't water.

Also I want to offer my mushroom farm layout.

P.S. Also please take in account that 1 tile = 2 ft.