All this setup stuff is very very intesting, because each guitarist has his own view & feel. Regarding action, I setup all my guitars with 1mm between the string and the fret, at the 12th fret. That's way too low for many people, but I like it. And I understand I'm sacrificing tone for comfort.
Higher action = better tone & sustain, that's a fact. To add another anectote to this thread, I once saw Yngwie Malmsteen guitar. I always read about how high he had his action, but I didn't imagine it was that high... crazy high action.
