Mine right now are around 3 inches off the water, but I run Glass Sheilds to prevent them from getting splashed. I'm in the process of building a new hood in order to get rid of the glass (and some other things). Once completed, I expect the lamps to be about 9 inches off the water. You can go closer, depending on how much surface activity in your system, and if you have any large fish likely to splash (like my fat ass Sailfin). Personally I think I'd keep it around 6inches as my minimum, however YMMV.
7-8" from the bottom of the bulb to the water surface. I think there is too much attenuation of the light at higher points and you'll not get the bang out of the bulbs. About the best thing I can think of for setting the bulbs so high is that there is less of a heat issue.
Height depends on application. If the bulb is going to be conforming to the standard 1 bulb per 2 foot rule than I prefer to have the bulb as close to the water as I can i.e. 2-4" and splashing really isn't much of an issue unless the bulb is practically submersed. Heat shouldn't be too much of an issue either provided the hood is properly ventilated. I just finished installing a lighting system in a friends cap for his 90 gallon. The R&J cap was about 6" tall. I installed a 36" PFO reflector with 2 moguls. Mounted in the reflector were also 2 x 96W PC blues. The bulbs were 2 x 250 5500K Ventures. I had matt cut and rout holes in the ends of the cap for 4" radioshack fans. I did have to add 1" spacers to raise the canopy up. Bulbs are approximately 3" from the water surface. When we fired the lights up over the next week my friend has to turn his heaters up because the fans were doing such a good job of ventilating air and causing evaporation that his tank temp dropped from 82 degrees to 77 degrees.
However say you are violating the 2' standard and want a single bulb over a 3'foot tank. In order to get an even distribution of light throughout the tank you'll need to get the bulb a good 10-12" off the water and also likely upsize the wattage to compensate.
[ January 11, 2002: Message edited by: MickAv8r ]</p>