So I see a lot of "how do I set my seat height?" threads, but I did not see how high or low do people actually set their seat? Where do you set it and why? For me, I need it as high as possible or I'll get knee problem which always pushing me to the top limit of any seat post I own unless I buy a tall one.

I buy bikes where the frame allows for the seat to be close to one third. This isn't really by any design, other frame sizes just don't feel comfortable. I rock the saddle back and get some good extension to the bars. Apparently I would make a good audax rider.

Full extension with heel on the pedal. For me this results in the proper bend when riding with the ball of the foot on the pedal

For grins this is how it is on the trail bike.

A touch lower as I tend to ride with the arch of my foot on the center of the platform pedal.

1. My saddle is situated on top of the seatpost. That's where the attachment piece for the rails is, so it seemed logical to put the saddle there.

2. When I am seated comfortably, and straight (not leaning to one side or the other) on the saddle, and my heel is on the pedal, my leg is fully extended.

That's what I use too. According to the various seat-height calculators out there, you and up around +/- 0.25" from this position.

I have to keep my seat pretty low, 1 because I have a tall frame, and I have a 35lb one day, close to 45-50 one day, backpack. But on weekends I raise it up about 5 inches.