Use the adj pan-hard to center the diff once desired height is reached.
Install bottom (longer) arms first and set to stock length, changing these only alters the wheelbase length, has little to no effect on anything.
Install top (short) arms, start at stock length,
From what I've measured before, have the diff nose 5mm above level gives good results, anything level or nose down just axle tramps.
But as always chassis stiffness, shock/spring pressure all come into play as well, as mentioned, adjust to what YOU like. There is no real written rule.
More importantly than that... make sure your pinion angle stays correct. The gains from lengthening/shortening arms are MUCH less important than keeping your driveline alive.
If you want more traction, get traction brackets.
Andrew