.120" is a safe number to use for a lot of common lifters of this era design. They can have more, but you can usually get that, no problem. The whole point is to have a generous range from the nominal position of the lifter piston to allow for variations in production parts. If you mill the heads and don't adjust this, then you are counting on using up some of that extra preload 'range'.
How much is good is somewhat a matter of preferenece. For just street running, anywhere in middle of range is fine... and in reality anywhere in the total range is OK. But, if you milled the heads for example, and one of the lifters ended up right near the bottom of its range, then something like expansion might make it hang the valve open a bit.
One performance reason to try for less is that if you rev it and the valves float, then a smaller preload limits how much the valves will be held open when the float stops and the valves try to sit on the seats again. The valves/springs will push the excess oil out of the lifters and settle back on the seats more quickly with less preload. Preload numbers of .020" to .050" seem common.
Pushrod lengths, rocker shaft position, and adjusters are the typical way to set this.