My Xenia are directly in the path of a -tiny- powerhead. They do not rest horizontally due to flow, so I'd saw moderate current. They're under MHs and have acclimated wonderfully. I have so many now (started with 2) that they drown each other out for light. I'll be trimming them soon.
Anyways, they like a decent amount of light, MH
not required, and they like to have flow. Mine have always done excellent in that spot, and they're now spreading across the tank.
1. Light - they like it...don't be too afraid to give them too much. Mine thrive under a 250w 10,000K MH
2. Flow - they like a decent amount of it. They like to gently sway in the currents, and they do indeed like moderate flow.
3. Height - They don't seem to care. I have them growing on top of a rock, with their tips 4" from the surface, all the way down the sides and front of that rock to where one touches the substrate with his stalk. If I had to pick, I'd go wherever they can get some decent light and a moderate flow, and that location is probably perfect.
125 gallon saltwater: 55gal sump, 4 Blue-Green Chromis, Purple Tang, True Perc, Firefish, Royal Gramma, 5 Ricordea, Bubble Coral, 15 Pulsing Xenia, Green Star Polyps, Deresa clam, Green-Tip Torch Coral (about 11 "heads"!), Orange Montipora Cap, Purple M. Digitata, Green Slimer Acro. Yongei, 3 Orange M. Digitata, Pink&Green Acro. Millepora