Bicycle Mechanics - Front derailleur height

I looked at the 105 double service instructions and Shimano says to adjust the height of the front derailleur 1-3 mm above the large chainring. When reinstalling it after cleaning I set it at 1.7 mm which was much lower than from the factory. Is there a reason you'd install some at 3mm and others at 1mm? What are the tradeoffs? This is a compact 50-34 if it makes a difference.

I always set the derailleur as low as possible without having any interference; I set it so that a dime barely fits between the cage and the large chain ring teeth, which I reckon is about 1mm. Check the clearance at several chain ring positions as they are seldom perfectly round or centered. In general a lower derailleur setting will yield crisper shifting, IMO.

From experiance I have found that finding the perfect FD height can very a lot depending on crankset and gearing sometimes as low as a half mm up to about 4 above the big chain ring. Normaly I just find the lowest point at which everything works good and raise it just a bit. Your setting of 1.7mm sounds about right for most setups. If you found a hieght that everytning works great at with in reason I would just leave it and stop worrying.

i don't measure the gap but i set it low, under 2mm probably. sometimes the middle ring bumps into the fd on a triple so i have to raise it up

That 1-3 mm is a range, not a fixed value. Shimano is saying anywhere in that range (and perhaps a bit outside of it) will work best.