When people discuss water temperature, where are they talking about? Top (surface of the water), middle (half way down to the bottom), at the bottom?

Surface

Most people talk about the surface temp. Which really don't mean a whole lot. It could be 85 on top and 78 5ft down. The transducers or temp gauges usually don't go but 2-3ft in the water which is where the temps are usually coming from. An accurate temp reading would be at the depth the fish are holding. After 70 degrees DO, pH, thermoclines, and other factors usually matter more than the tempature.

As stated above, surface temperatures.

We have equated surface temperatures with bass activity.

So if the surface temperature is 80* it means the bass are active. If it is 65* it means the bass are bedding.

The temperature under the surface is not used.