I can understand your concerns, but I have been to weddings that did this, and it IS workable.  It may not be the optimum situation, but for some locations, it is a logical solution.

When the ceremony and reception are being held in the same place, available space often does not allow for a separate ceremony and reception seating.  If they cannot both be fit in the single space, the only other option is to have traditional ceremony seating, then have tables set up afterwards.  This can be a logistical nightmare, since
often there is no logical place to put/send guest while the
"change-over" is made.  To me, this is much tackier than having guests watch the ceremony from their tables. It also leaves you less opportunity to really decorate the tables as completely as you might if you did it beforehand.  So, unless there is ample room to create both ceremony and reception areas-- or there is a garden area on the grounds or some other room appropriate to hold the ceremony-- you may well need to have the guest watch the ceremony from their tables.

If this ends up being your choice, consider the following in your planning----

~ Where will you enter from?  Exit to?  Or will you stay in the ballroom and get straight to the toasts, etc., once you've been pronounced husband and wife? If you choose to leave, I have heard couples in this situation say that it felt a little strange to go in, leave, and come back again later.  However, many couples look forward to a moment alone between the ceremony and reception.  You will need to think this through with your fiance.
~  Where will you position yourselves for the ceremony?  In the center with the tables all around?  At one end of the room, perhaps near the wedding cake and/or bride/groom's table?  Remember that the more "layers" of tables between each guest and the ceremony, the more
difficult it will be for them to see.  If possible, go and sit at some of the tables and look around you. Bring a couple friends or family and see how it might all look. Sometimes a circle or half-circle arrangement of the tables around the ceremony area is the best.  Some guests will
see you from the front, some from the back, some from the side-- but everyone may have a slightly better view than if they have to look to one end of the room past all the other guests.
~ Will guests have enough room to turn their chairs so that they won't have to look over their shoulders?  Most weddings take about 15 minutes or more, so you'll want guests to be very comfortable.  You will also want it to be very obvious where they will need to turn their attention,
and when... so there's not a lot of bustle and confusion distracting from the entrance of you and your maids.  Or, you might actually set the chairs that will need to turn so that they are neatly facing the ceremony area before guests arrive.  Just be sure to allow enough walk-through room between chairs and tables, so guests can easily find their spot.
~ Will there be any obstacles to guests' line-of-sight of the ceremony? Are there columns in the ballroom?  Plants or other decorations?  You will need to think this through carefully.  You will also need to keep line-of-sight in mind when you are planning your centerpieces and other
decorations.  All the guests will want to be able to see you, not a topiary, candelabra or balloon bouquet.  : )

Try to be flexible in your thinking and planning.  This kind of situation does not follow all the normal "rules", but that doesn't mean you can't work it out to be lovely and gracious.  I don't know where your ballroom is, but I have seen some really WONDERFUL historic ballrooms which would be well-worth working through the initial
awkwardness of the unusual logistics.

Foreverwed.com expert-- Sara L. Ambarian