Consider the following examples: set to a level sufficient for the directive you've used.Consult the documentation for that particular directive to determine which is the case.
Consult the Rewrite Guide for more detail on this subject. You are permitting users to modify server configuration, which may result in changes over which you have no control.
Carefully consider whether you want to give your users this privilege.
Here are some details: Either of these scenarios can be dangerous, especially if the custom rules are required for site functionality, navigation, etc.
For example, at my Word Press Bookstore, I use custom permalink rules to account for variations in store items, custom/short URLs, and more.
This is handy for retro-fitting a website that was not designed with mod_rewrite in mind.