Pickup Height and Pole Height.

capnjim said:

On my Strat, I have the middle pickup much lower as I find it gets the most Strat-quack this way.

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dcole said:

.. to the point where the volume difference isn't to noticeable.

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I set up a friends Strat this way too.
The middle was hotter than the other two.
I put it right down flush with PG.
Equaled out the volumes and he liked it because he no longer hit the pup while strumming.

Regarding the OP, there is in fact some science to pickup height.
It's good to have a basic understanding of how pickups work before making adjustments.
That knowledge will help a person understand what is going on and why.

Science tells us current is induced in a wire when the wire is exposed to a changing magnetic field.
Key word is changing.
In the case of guitar pickups the iron (and a few other elements) in the string vibrating over the pup interacts with the magnetic fields of the pole pieces.
The interaction with the fields causes the fields to slightly fluctuate with regard to their strength and focus vectors.
It is a relatively inefficient way to expose the wire in the coils to a changing magnetic field compared to, say, a generator or a transformer but it is enough to induce some very low level alternating currents in the pickup coils.
The other scientific phenomenon that comes into play is the relationship between distance from source and field strength.
With regard to electromagnetic energy the rate of change in field strength is equal to the square of the change in distance.
The ways text books describe it is that field strength is inversely proportional to the square of the distance from the source.

The ramifications of the above are:

Higher pups (closer to strings) will create a hotter signal with accentuated lows and sometimes reduced sustain due to magnet pull.
Lower pups will create a softer, chimy vintage style signal with reduced lows.
On Strats a high setting can sometimes reduce the signature Strat "quack" in positions 2 & 4 and replace it with honk.
Low settings can enhance note definition, articulation and dynamic range.

When taken to extremes, too high can induce extraneous noise (rattles and boominess).
When playing chugga-chugga riffs while doing some palm muting a too high setting can result in a "blap" sound if you push too hard with the palm and the string touches the poles.
It can also decrease the ability to get your guitar to clean up with a volume roll off.

When taken to extremes, too low can result in very low volume and thin sterile tone.

When making adjustments, less is usually more.

If you are reasonably happy with the sound of your guitar you probably shouldn't fuck with it.

I run all my guitars about stock or roughly equivalent.
Not high, not low.
My adjustments are usually to find balance between pups.
I also usually tilt my pups slightly at the bridge.
On a Strat I will often have the high E lower than the low E because the bridge pup on a Strat can often be in want of thicker lows.
On a Les Paul I usually reverse that because Les Pauls can get quite boomy and inarticulate if you aren't careful.

DaddyDog said:

If the string is too close to the pickup, the magnet prevents the string from vibrating freely.

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That's the received wisdom, however it's going to depend on the "tug" of the pickup and the gauge of the string.

Think of it this way: imagine a 50ft rope, as thick as your wrist, stretched tight between two points. "Pluck" that rope and now try and make it stop vibrating using only pressure applied with your index finger at one point. Chances are pretty darn good that the rope will keep vibrating for a while, despite the applied pressure. Okay, now pluck a .009 gauge high E and put your index finger on it. Chances are pretty darn good it will come to a dead halt, milliseconds after you touch it.

Most polepieces are not going to be so strong that they exert significant tug on anything but the very thinnest-gauge strings, unless the string-to-polepiece distance is so slender as to practically prevent picking. Besides, once you plug in and the amplifier volume exerts a little vibrational stimulation of its own on the guitar body, the influence of that physical vibration of the body will be stronger than the polepieces. The amp will tell the string "Keep moving!" much louder than the pickup will say "Sit still!".

As well, consider the case of "horseshoe" pickups, that place magnets below and above the strings, with a narrow space between. If pickups' magnetic tug on strings killed sustain, those pickups ought to result in strings that decay mere moments after you pick the strings. Instead, horseshoes seem to have much more sustain than regular pickups, which is why slide players love 'em.

Bottom line: Adjust height for tone, but don't think you're adjusting for sustain. (I might make an exception for the low-impedance pickups on the Les Paul Recording and similar. My recollection is those suckers have some serious magnets.)