I admittedly forgot about this thread for a while until I saw somebody resurrected it. Some of you have the correct answer, but have not provided a rigorous basis to say WHY it's correct.
This problem is really a sensitivity analysis- what nominal angle do we want to measure so that we minimize the sensitivity of our height measurement to errors in measurement of the angle.
This will involve some simple calculus- the harder part is figuring out how best to non-dimensionalize the problem.
It is easiest to work with the height of the tree minus the height of the user (6 feet). We can estimate this reduced tree height \bar{H} as:
Our measured height \bar{H}_m involves an error H_error due to an error term epsilon in our measurement of the angle theta. Substituting x from the above equation gives:
Solving for the height error and normalizing by the actual height \bar{H} will give us a fractional height error E_f:
We can find the change in fractional height error for a change in epsilon by taking a partial derivative, and evaluating at epsilon=0 (this will hold for reasonably small angular errors, on the order of a few degrees):
We could again differentiate this to find that it has a minimum (over the 0 to 90 degree interval) at 45 degrees, but it is easier to do via inspection:
This has a clear minimum sensitivity at 45 degrees- a bit over 3.5% of measured height per degree of measurement error. As you get closer or further from the tree, your errors due to angular measurement error increase dramatically.
As a test, we can explicitly determine fractional error for a given scenario- 70 foot tree, 6 foot user, and a 45 degree nominal measurement angle. A 1 degree error in measured angle corresponds to about a 3% error in measured tree height.