I am currently building a stratocaster and had an idea to get more versatility from it. I want to try to wire in a piezo transducer. When doing this is it better to add a new output jack and install a preamp so that the piezo is set off by itself? Or should you wire it into the switch and knobs for the single coils. Also does it matter where on the guitar you put the piezo. Any informations would help.
You'll need a preamp or at least a buffer for the piezo. Personally I'd wire it to a switch to change tones on the fly.

And the short answer is: hell yes it matters where and how you install the piezo. Piezos work by converting the vibrations of the guitar itself into an electrical signal. They work nothing like regular guitar pickups.