I'd recommend torquing it till the rubber bushing is spread enough that it is just surpassing the edges of the washer on top of it. One tech at a tire shop that I was at torqued a set all the way down and I feel it looked like there was no play left in the rubber bushing at all after that, and then what is the point of the bushing? JMO - YMMV
Some have torqued it all the way down, I don't think it matters.
FWIW, the way I did mine is I matched the bulge of the thick, rubber isolating spacer on the OME assembly to roughly the same bulge as that of the stock assembly. I think I gave it a crank or two more on the socket wrench, but it was well compressed and almost to the end of the threads.
I see us FL boys are piping up on this one. I guess it depends on who you talk to. The fella at the shop I had compress mine told me he torqued it down till the threads exposed where the thickness of the nut.
I asked this question because I just installed the OME 3" lift, and developed a "clunk" in the front suspension on the driver's side. It happened off road, rough terrain, when the wheel was up and just starting to come down. In other words, just as the strut was starting to de-compress.
I had originally installed it with the nut partially tightened, revealing only 6 threads above the nut.
Based on what I read here, I went ahead and tightened the nuts all the way down. I just off road tested it. The "clunk" is gone. I think it's fixed.