What is a good distance between the coals and the cooking surface in a charcoal grill?

It depends on what you are cooking and whether you use foil. Start on a higher rack. Depending on how hot the coals are, you may have to raise or lower the surface. Though if you do lower the surface and things start burning or cooking too fast, be sure to raise the surface back up. :)

I'm making my own grill and more than likely the distance will be fixed. I'll place my coals so there is a direct heat cooking area and an indirect cooking area. I'm just looking for an average height.

I have seen 3" in several meats, but like 08 said...it depends I would build notches for something like 4", 3" and 2"... just to give you option for different meats