I just sighted my 16" ar in at 100 yards which is my ranges maximum. I had the rear dial "1 click past the 8/3 marking" and made my height adjustments with the fsp. Now that its dead on at this setting whats supposed to happen when I turn the dial counter clockwise one click back to 8/3? Also, why wouldn't I want to set it closer to a middle of the road setting so I can make height adjustments up and down? I'm having trouble fully understanding the settings and purpose of the A2 rear dial. Thanks in advance, Brian

The rear dial is used exclusively to elevate the rear sight for longer ranges. The rifle should be sighted in per the manual using a 25m sight-in target, that should result in the long range aperture being zeroed at 300m. The 0-2 large aperture sight is supposed to account for ranges from 0-200m, and the long range aperture should be sighted for 300m, and has the correct bullet drop adjustments at each marking for M855 fired from a 20" rifle.  The shorter carbine barrel should be used with the carbine 6/Z sight wheel instead of the rifle 8/3 sight wheel.  A2 sights are not intended to hit bulls eyes in target shooting, they're designed to hit man sized targets nicely in center of mass.

If you're sighted in with the sight wheel one click from 8/3 at 100yds, you've got many inches of bullet drop at 200 and getting worse further out, and are probably not properly zeroed for your long range aperture at 300m which would let the sight wheel adjustments do their job properly.

With a 16" carbine, the 8/3 is not the ideal sight wheel, and your rounds will drop off more than the sight wheel was made to adjust.  A 6/Z wheel would have you shooting a bit high, since the 16" barrel will generate a bit more muzzle velocity than the 14.5" military M4 barrel.

For closer shooting, you might want to try the 50yd modified bzo: http://www.thebangswitch.com/the-50-yard-zero-for-5-56mm/

Set up your rear sight like this:  http://www.ar15.com/forums/t_3_18/328143_.html