You want to have the bicycle seat set to a height that allows your leg to extend until it is almost completely straight when you are sitting on the seat. There should be only a slight bend to the knee when your foot is on the pedal in the bottom position. This will maximize power and minimize fatigue.
A common mistake is for people to think that they should be able to sit on their seat and still plant their feet firmly on the ground. Riders should come off their saddles and straddle the bar when stopping the bike. If you can sit on the seat and touch your feet to the ground other than on tippy-toes, your seat is too low.
