Join Date: Mar 2005
Location: SF Bay Area, California
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Some old rules of thumb, regardless of the minimum insertion mark indicated on the seatpost itself, are at least 1" below the top tube junction, or at least 4" total. But the frame manufacturer should be able to give you something definitive.
For instance, I owned a Giant that required a total of 6" of insertion. Specialized, on some bikes, drills a small hole in the backside of their seat tube to indicate how deep the seatpost should be inserted. Both of those examples supercede whatever minimum the seatpost manufacturer recommends.
Like jst wrote, reduced insertion = greater chance of tweaking the post and the frame.