How high should my aquarium water level be?

[abcha0s]

That's basically right. decide the size of the wave and split it in half then add 1/4". You might add another 1/8" for the hieght of the water over the overflow. This number will tell you how far below the top of the tank to place the top of the overflow.

Waves will stress your tank. Tunze suggests a reduction in the overall life of the tank and cautions against using them on older tanks.