As far as "ball height" goes, should I measure from the top of the coupler to the ground when the trailer is LEVEL and then make sure that the top of the ball on the receiver is the same height?? I've read some other posts where the guys are adamant about the trailer being towed LEVEL or as close to level as possible(??)

I am one who believes that the trailer should be as level as possible when towing.

Your method should work. Just make sure your trailer is level and on level ground when you measure the coupler.

The tongue at the hitch should be slightly down hill for best tracking.

Whether you are a perfectly level or slightly downhill guy... just remember to measure the amount of drop your vehicle has when the trailer goes on the ball.  Some will drop more than you think.

The camber of the axle is set for a level frame. If you go much higher or lower than level, you will add toe-in or toe-out tire wear.

THANKS, guys!! I went to San Diego Trailer Supply and they set me up with everything I need. Seems my Explorer already was factory wired to tow a trailer and all I needed was a coupler harness. My wife is going to help me check it out tomorrow.

You would like to have the trailer as close as possible to level, but if you can't make it perfect this is what I do.  I have the under bumper hitch that mounts to the frame.  So the normal hitch receiver drops a little and with the slight drop under the bumper you are already lower then the trailer.  I usually get the normal receiver, but I turn it upside down so it actually goes up and not down.  Then put the 2inch ball on top of it and it is about the same height of the bumper, maybe slightly below, but it's not 1-2 inches below.  That usually puts the trailer right near level.

Then with a 1 7/8 ball I usually keep it going down because a 1 7/8 is usually on smaller lower trailers like utility, lawn mover, and bike trailers.  

It also makes it really fast to grab which ever one you need because one will drop down and the other will come straight out.

You turn that receiver over on most 4WD vehicles and you will have that tounge 2 feet off the ground.  I run a 6 inch drop on my 4WD chevy pickup.

If it's a new boat/trailer, hopefully you have a dealer that keeps up with those types of things and will have the manufactors recommended tounge height.  If not, go with what the other's have recommended, level or slight drop at the hitch.  Try to avoid towing with the higher than level, this will usually make the trailer sway back and forth.