Ahh. The manual you get with it is crap! It tells you all sorts of erroneous things, strangely enough.
From what I've read, the powerhead should be within three inches of the water surface to maximize skimming and reduce microbubbles (not sure how this matters, but apparently, it does!) As well, the top of the bubble diffuser box should be as close to water level as possible.
I had a problem with microbubbles. I got rid of the useless white filter pad at the bottom of the diffuser box and replaced it with the black filter sponge material. A hundred times better! There was also a lot of water splashing upward from bubbles that would burst at the surface of the diffuser box, so I got more black filter sponge and put it at the surface of the box. Voila, no splash.
Just a few tips from a once-frustrated CSS user! It works great now, but took a bit of TLC
