I'm having trouble understanding the placement of "itt" in the sentence. Is this the only possible position?
No, it's not the only one. Actually you could put it anywhere in this sentence (except between "soha" and "nem").
My relatives often use soha without nem - soha látok etc - is that just idiosyncratic/bad grammar?
It's definitely bad grammar in standard Hungarian, and I don't know about any dialects that use it this way.
Could they be saying sose látok, perhaps?
"Sosem látok itt rendőröket." Ez miért nem jó?
Még nem adták hozzá a helyes válaszokhoz. Jelentsd, és megteszik. :)
Is there any difference between soha nem and soha sem?
Soha sem látok itt rendőröket.
No difference in meaning, at least I'm not aware of any. One little thing though: "soha nem" is written separately, but "sohasem" is one word.
Why is "En soha nem latok rendoroket itt" wrong?
it should be correct grammatically but sounds better the other way.
Would it be better Hungarian''soha sem latok rendoroket''