Lift-off distance is the maximum height your mouse sensor can be from the surface before it stops tracking, and it determines how much unintended movement is registered when you reposition your mouse. The higher the lift-off distance, the more your cursor will move on screen when you lift up and put down your mouse. The optimal lift-off distance for you, depends very much on your playstyle, though generally, a shorter lift-off distance is preferred. The lower the DPI on your mouse, the, the more important lift-off distance is for you, as you would frequently need to reposition your mouse.
Low-sensitivity pro-gamers who do a lot of broad-stroke swiping with their mice have to pick them up when it hits the edge of the mats to reposition at the centre. Some mice when lifted like this may cause on-screen cursor jitter as mouse-to-surface tracking continues. This is a detriment to gamers who need absolute accuracy in their games, as the cursor being thrown off a target might mean the difference between winning and losing.
In a Razer gaming mouse, once the sensor has been calibrated to the surface (see “Surface calibration”), you can customize the height at which tracking is cut-off when the mouse is lifted. This ensures on-screen jitter is reduced; so your aim stays dead-on target even as you move.