I put the stack at the highest point possible on my CC and I've never had any issues. My food always has plenty of smoke flavor but not over powering. A lot of guys put them at grate height and say that they don't have any problems either so I guess it's up to you.
Yup. I have mine at grate level - bottom grate level with 2 grates. Works very well. But like BigT says, you can go either way since there are tons of folks happy with both.