The Great Rack Pull Myth
This is a classic case of an idea that works beautifully in theory but, at least in your case, fails to pay off in the real world.
The theory behind rack pulls is that they allow you to use more weight than you normally can handle in conventional deadlifts, which helps target certain sticking points, namely the lockout position—a real sore spot for many lifters. Sounds good, huh? Like I said, it's a swell theory.
The problem is, I'm not sure how effective this is for most people. I've seen (and experienced) many extreme rack pulls that rarely carry over to the actual deadlift. Personally, I've actually pulled over 900lbs from a rack and could barely lock out 700 in the full range deadlift.
Now, perhaps this 900lb rack pull allowed me to lock out the 700, but I have a seriously hard time believing that.
I think part of the problem is how rack pulls are performed in training. Most of the time these are done for sets of 1, working up to a 1RM. That's fine and dandy if you want to test your rack pull and see where you're at. But all that does is test you, not build you: if training to a 1RM was all you needed to get stronger, then all you'd have to do is enter a meet each week and max!
Question: How many times have you seen a lifter hit the weight room and work up to a max single on the bench press? And do this every single workout? And where is this person a year from now?
Answer: He's the same. Or he's hurt, or overtrained, or worst of all, he's sitting at home arguing on the Internet about strength training.
The rack pull needs to be treated in the same way as we treat other assistance work, but with an added caution: there's a difference between rack pulls and back extensions, and doing multiple sets of 10-20 reps of back extensions isn't nearly as stressful as doing the same thing with rack pulls.
Having said that, perhaps doing repetitions on some of the popular 1RM exercises like rack pulls will help develop and strengthen the areas that they're designed to help. Doing some sets of 5-10 reps certainly won't hurt you, and will probably develop some much-needed muscle mass.
But these need to be programmed into your training with caution, son. So let's say you're running my 5/3/1 program and wish to add rack pulls into the training. Because it's a bigger assistance exercise, we can easily account for it with some minor changes:
65% x 5, 75% x 5, 85% x 5 (don't go for max reps on the final set)
4 x 6-8 reps at 80% of rack dead max
Glute Ham Raises
3 sets of 10
3 sets of 20
As for setup: where the bar is positioned during the rack pull is largely going to be determined by your power rack. Racks with large spaces between holes obviously limit you, although you can put the bar in the rack and adjust the height of your feet with mats or plates. Truth is though, that's a major pain in the ass, so just pick a setting below your knees and tug away.
Notice I said BELOW the knees. I'm not a fan of very high rack pulls (above the knees) namely because, a) it ends up being yet another faggity ego contest, b) the bar bends and ends up being an even shorter rack pull and, c) the body position during the rack pull is vastly different than when used during the full range deadlift. In other words, try to find a position below your knees.
The most important thing to remember is this: The rack pull is not the end itself, but a means to an end. Don't be one of those guys that plays for Team Rack Pull and shits the bed when it comes time to pull from the floor. No one cares what you can tug from pin #9 (with straps); we care what you do from the floor with just a belt.