The key is to have your hand (the center of the palm) in approx. alignment with the basket and your shooting eye. The elbow has to be out to the right a bit to do this, and that's normal.
How high you go above your shooting eye depends on your strength. Have it as high as comfortable, where you have enough strength to send the ball 4', 5' or more. Higher is better, as it's harder to block, but you don't want to raise it so high you weaken your shot too much. Younger kids have to lower it below the eyes until they get the strength to jump it up to above the eyes.
The higher it is (to a point), the more quickly you can fire off the Release without holding back. Chris Webber takes it so high he has no arm straightening left, and his shot is totally a wrist flip. Rasheed Wallace takes it very high, but still has 4-5" left to straighten his arm (this is for his inside jump shots -- his set point is lower for outside jumpers and 3's).