it depends on the type.
If you're using a "tape" that has an applicator kind of thing... you can do it on the bike, spinning the wheel.
If you're using the 1/4 wheel "sticker" type, you NEED to take the wheel off to not have it look like crap... even if you think you can get to 1/4 of the wheel at a time.. its worth taking it off.
in either case, wipe the wheel with a wax and grease remover.. (or atleast brake cleaner)
as far as results... Ive done both.. I kinda like doing the tape better because its easier...but they both come out the same if you take your time.... Ive also done wheel lights and all kinds of "squid" mods for show bikes.. none of it is anything I would consider hard... just pay attention to detail.