Ride Height is the height of clearance the car has between the bottom of the car and the road. The ride height has an impact on the car's centre of gravity, and thus on its behavior when cornering or braking. Basically any shift in weight. Because great amount of aerodynamic downforce is created by F1 underbody, ride height is also important for overall grip created by aero. It is well known that the underbody aerodynamics is very sensitive to the ride height
There are good reasons for reducing the ride height. In general; lowering the Ride Height will bring the centre of gravity of the car lower, making the car more responsive by decreasing body roll because the weight of the car is now lower. Also downforce created by low F1 car is greater.
Raising the Ride Height will have the opposite affect, which will increase body roll.
That was the generalized bit.
Like with all parts of the F1 car that you can tune, over tuning and under tuning will each have their drawbacks. A lower ride height in the front than at the rear will induce weight transfer to the front increasing the load. This may be what is wanted.
Ride height will also impact the available suspension travel rate, so engineers have to make sure the spring rate is high enough to prevent the suspension from "bottoming-out". Having the ride height too low and suspension won't work very well. The trickiest part is to have your ride height as low as possible, for maximum tire grip, downforce and overall neutral handling balance, while still allowing for enough suspension travel.
During the wet race, ride height should be higher to aloud water, pushed below car by air entering below underbody, to freely go below "wooden" plank. Otherwise, underbody will swim on the layer of water resulting in non drivable car (body aquaplaning).
Deviation of floor plane from horizontal is called Rake Angle. Positive rake angle is higher end, and negative rake angle is higher front of the car. Negative rake is not in use in racing.
Lower front and higher rear ride height - the weight of the car is shifted towards the front. Provides more stability while accelerating. Brake response is faster since weight is already where the braking power is highest.
Equal front and rear ride height – weight is distributed equally.
High front and Low rear ride height - the weight of the car is shifted to the rear, provides immediate throttle response during acceleration. Not bad thing during the start phase, but braking response will suffer too much. Because we are not talking about Drag race, this configuration is not used very often.
On very bumpy roads like Monaco GP, increase ride height and increase spring rate and shocks. This "soaks" up the bumps more effectively.