Adjust the seat fore and aft on the rails until the plumb line bisects the pedal axle. Comfort is the deciding factor. Sit and spin on the trainer and see how it feels. Or videotape yourself and see how you look. On mountain bikes, the right reach usually places the bars an inch ahead of the hub.
Comfort is key.
If all your weight is on the seat and every bump feels like a kick in the pants, you're sitting too upright. Measure bar height by holding a yardstick on the seat so that the yardstick extends over the bars. On mountain bikes, height begins at seat level to about 3 inches lower than the seat. If your stem has one bolt on its top, loosen the stem by turning this bolt counterclockwise several turns and then striking the bolt with a block of wood. How you ride has a lot to do with comfort, too.