At our March 2003 Get Together, Edward Dick and Greg German hosted at the repair shop in the Olde Town Pickin Parlor in Arvada. Edward demonstrated his method of setting up a guitar, diagnosing and correcting fret buzzes. Greg illustrated these principles in the handout pictured below. Scroll down for commentary.
These are not absolute measurements, so use them as a general guideline. Lighter strings and/or vigorous playing style may require more of a relief curve.
The curvature of the fretboard is measured in each case by using the string as a straightedge. The ideal-shaped fretboard has a relief curve of about 0.006" evenly distributed between the 1st and 12th frets. Fretting the first and last fret should leave no gap at the 12th, since the frets past the 12th should either be flat or drop off a few thousands of an inch.
A common curvature problem is illustrated here as the 'ski jump' neck. There is too much total relief, and most of the curve happens at the beginning and end of the board. Tightening the truss rod can help, but substantial filing of those frets from 13 to the end is almost always necessary as well.
The body joint hump is another common problem. Frets 14 through 16 are the usual suspects, and a ruler will rock back and forth to demonstrate the bump.
One thing to note is that the relief curve often is centered on the first 3 frets, since necks often get progressively weaker as you approach the nut. Tightening the truss rod in this case just serves to flatten out the area between the 6th and 12th. Dressing the frets after tightening the truss rod to correct the overall curve is one way to correct the problem. (A refret is another.)
The height of the nut slots is often responsible for stiff, uncomfortable playing in the first position. Cut the slots to leave a barely-visible gap at the 1st fret when you fret the 2nd.