Depends on your u-joint configuration. Check out "Geometry 101" in Tom Wood's Tech Info section.
http://www.4xshaft.com/
Compare the conventional two joint shaft with the double cardan or CV style shaft. With the double cardan style joint at the transfercase output, you want to point the pinion at the output or slightly down (~1°). With the conventional (factory) style you want the output shaft and the pinion shaft to be at the same angle (parallel) or slightly down (~1°). The 1° is to compensate for leaf spring wrap-up under power. With any configuration, 1/2° of misalignment at the joint is a good idea to exercise the needle bearings.