In my very limited experience with the laser, I find etching with the laser 1" above the material produces a finer/cleaner line. 3" above didn't give me the crisp clean line I wanted.
I have made test etches in MDF, bamboo, maple, masonite and padauk. I have gotten really good clean lines in all of them.
You really need to turn the power all the way down on the laser to get a good focus. I put on my reading glasses and really made sure the focus was as sharp as I could get it. it does not focus to a pinpoint, it is a small rectangle shape.