Grate positioning for charcoal grill?
Distance from charcoal isn't really the issue (some steak recipes, in fact, call for the meat to be cooked directly on the coals).  It's the temperature at the grate you ought to consider.  Granted, distance is one factor in grate temperature.  The amount of lit coals you have is another.

As for proper temperature, it all depends on what you are cooking.  I like cooking my steaks on high heat, about 500-600F.  Burgers at around the 450 range.  Poultry closer to 400.  Look up the "Mississippi Test," often referenced by Steven Raichlen, as a good way to measure your fire temperature.