What kind of boat do you have? Is it an Outboard? I will assume that it is being that you posted in the Outboard forum.
I do not know the technical definition of X-Dimension, but the general idea is that X-Dimension refers to the height of your propshaft relative to the bottom of your boat. For example, most stern drive family boats have the propshaft 4-6 inches below the bottom of the hull. Most high performance outboards run the propshaft even with the bottom of the hull.
Finding the correct X-dimension is a function of what you want the boat to do and the type of boat you have.
If you want to pull skiers, wakeboards, and have an all around good performing boat for family purposes, leave the propshaft below the bottom of the boat at least a couple of inches so that your prop gets good blue water, not white water and subsequent cavitation. If you have a tunnel, or even a V and want more speed, raise your motor until your water pressure starts to fall below 12 lbs. This will create less drag and produce higher speeds. If you do not have a nose cone and low water pickup, you will be limited on how much you can raise your motor. Another item to think about is a jack plate which allows you to raise and lower your X-Dimension at the flick of a button. Good Luck