The Z Offset is the initial distance between the nozzle and the print bed. It is adjusted by turning the screw mounted on the back of the case, to the left of the Z stage, up or down. As the Z stage rises toward home, a limit switch on the top of it bumps into the screw and stops the motion. The higher the screw, the closer to the nozzle the bed will get before the switch is activated.
Here are some sample first layers to guide you in adjusting the Z offset-
This one has been smeared on the bed. The nozzle is pretty much making contact, and the extruder skipped a few steps trying to cram plastic into the kapton. If you have an unheated acrylic bed, you are in for some serious scraping to get this off, and you may never get it all.
This is pretty flat, and will give you a little bit of a lip at the bottom. If you are having trouble with corners peeling up, you might try going this flat to get some extra stick. Be aware that it will make holes a bit smaller at one end, for one layer. If you don't have a heated bed, this might be want you want to shoot for.
This is pretty good. It's a little flattened to give the thread more area in contact with the bed, but not enough to affect the dimensions too much.
This is getting a bit too high. It would probably be fine for this part on a heated bed, but if it were tall and narrow with a small footprint, it would probably come unstuck. If it was maybe 100mm wide and flat, there could be warping at the corners.
This is too high. The thread is too round for very much plastic to be pressed down on the bed. When the extruder changes direction, it pulls the thread along with it, "cutting corners." That is why the circles are misshapen, and if the straight lines were bumped into they would come loose and start flying around the bed. If you started this print and walked away, you would come back to a giant ball of plastic orbiting the bed on the end of the extruder.
The Z offset is probably correct or close to it when the printer arrives, since Solidoodle runs a test print before shipping. It’s pretty easy to set, just pause the print, pull off the plastic, turn the screw a little up or down, and restart. It might change from movement of the bed or extruder due to heat expansion so it may need adjustment from time to time.
The M3 screw has a thread pitch of .5mm so to move the bolt .1mm vertically you’d make 1/5 of a turn. Each picture shows the change after approximately a quarter turn of the screw. This corresponds to a change of roughly 0.12mm each time.