I try for top of the right hand side or bottom if there are 6 or less ads.
Lately, I'm getting "rewarded" with the premium spot on a lot of ads and I get tons of clicks, but it tends not to be profitable.
I think about lowering my bids, but then I'm afraid the new system will make a bunch of keywords inactive and demand more than my old bid. Kind of like playing poker, I suppose, but I don't know how to play poker!
I think you need to look at the competitive environment and your ROI requirements. My general goal is to be "above the fold" so I manage most of my ads for an average position of 3 or 4. I like to be the first one on the right if I can make it work. I generally don't worry about the ubiquitous Amazon, Ebay, Bizrate, Shopping.com, et al ads. They can be above me because I think people are used to them and look for something different. I also look at who is above my ad, and if that seller has a lesser deal or their web site is amateurish I don't worry too much. Even though my client's natural search results may be on the same page or even on the same line, I run the ad: it shows up on Google partner sites and most still make ROI. Every product category is different. I have seen some products that will sell profitably in #1 while I have seen others sell on the second page of results. It's all tracking, trial and error.