I've been fiddling with the Spot On program since I got my Nikon 4-32 scope a couple of months ago (too early to get the current $50 rebate - ugh!). I zeroed at 25 yards, just because with a .22 that seems like the range I'll be shooting at most often. I have had my scope as high as 3 1/4, but now I've put it back to about 2 5/8, and I like it there. I had always seen pictures of ARs with what seemed like ridiculously high-mounted sights and wondered how on earth that could ever work, but Nikon's program has helped me understand that once you get beyond a few yards, scope height doesn't matter that much. I guess bullet drop is actually our friend in this case, since it offsets the error introduced by the scope centerline being above the barrel centerline. I would say put it where it suits you, since being comfortable while shooting is way more important than the slight ill effects of jacking up the scope.
Do you guys ever use the elevation dial to compensate or do you just adjust your aim point? Being new to scopes, at first I thought doing the "click" thing would be really spiffy, but now I find it much easier to aim, say, an inch low at 50 yards rather than fumbling with the dial. Besides, I'm afraid I'll forget to set it back to zero. I printed a "Path Graph" of my current setup and keep it in my ammo box in case my aging brain can't remember how much to compensate at a given distance.