It needs to be something like at least 1cm below the lowest point of the seattube/toptube weld; I think that Brant mentioned that this should be find. If you’re a big bloke like me you might want a bit more just to be sure (I’ve got a long post which puts a bit of extra in the seattube on my 853 and DN6 Inbreds). If you’ve got a shimmed post then I think that the shim itself needs to meet the minimum insertion requirements.
B.A.Nana, the min. insertion mark on the seatpost has nothing to do with the min. insertion point for a frame. It’s there to show the minimum amount of post that has to be in the frame to protect the post from snapping. The min. insertion point for a frame is to protect the seat tube from snapping. Even if you meet the minimum insertion requirement for for post you still ought to check that you meet the min. insert requirement for the frame; it’s usally a point below the lowest part of the seattube/toptube weld (so for extended seattubes it can be quite a bit).