By water level you mean how "high" the water is in the tank, right?
Personally, and for none other than aesthetic reasons, I like to keep mine within 1 inch of the top, in my 10 gallon reef (back in the day), my 25 gallon reef (current), and my current 10 gallon fish only. And my 75 gallon fresh water, when I mess with it :)
Just a personal preference though...most people (that I've seen) keep theirs a bit lower, but I don't know if there's any purpose to it. I say get as much water in there as possible: more water = more dilution.