I'm running all LEDs for flowering and MH/CFL for veg, but have also vegged with my LEDs. For seedlings I would suggest putting it at about 16 - 18" to start. Watch your node spacing and try to keep it at right around an inch by raising or lowering your light accordingly. Once you get into flower you can lower it. Depending on the size of your area and the number of plants you are growing you may be able to get it down to 8 - 10" as long as you are still getting good coverage on all your plants.
Bleaching issues have been from some of the newer, higher intensity LEDs. The early 2011 GLH lights had problems with bleaching. I've also recently seen 1 or 2 from the newest Blackstars. It will start with the top leaves going yellow/white from the middle of the leaves working toward the outer edges. If you see any signs of this, immediately raise your light.