I've always heard you should be at or under 1/8th" what ever number of nickels or dimes that might come out to.
The idea is to use a tight enough tension on your mesh that you don't need to have your screen frame and mesh so far off the pallet that you are stretching the mesh, causing miss registration and distortion. Consistent tension is also required for good registration. The closer the better. The higher tension, the better (up to a point obviously). You don't need to shoot for some kind of tension that is going to cause more pops than good prints. I've seen it as low as 1/16th and as high as 3/16ths" with that shop. they mostly printed 1 color solid prints so registration or distortion was not visible thus, making off contact less of an issue. Father way, makes it harder to clear the screen and get a good snap off. When you see your mesh sticking to your print well after your squeegee has passed, that's a good sign of mesh tension being too low and the process of stretching the mesh out and image distortion is called bagging. This bagging happens less on nylon mesh, but on other types of screen printing, can become very apparent. You will see a drooping or sagging bag where the squeegee has stretched the loose mesh too far beyond it's memory strength.
All in all, tight screens promote close off contact, close off contact promotes good registration and faster production.
