To lower the string height you need to take off your strings, pull out your saddle and sand off from the bottom of the saddle.
Action is a relative thing. If you go too low you can cause buzzing on your uke.
Action is measured in millimeters.
If you dont have an action gauge you will have to measure with a ruler in increments of 64ths.
If you want to do this out of the gate without an action gauge you can search the internet for better pics but here you can buy an action gauge and/or use the pics for a guide:
http://www.stewmac.com/shop/Tools/Measuring_tools/1/String_Action_Gauge/Pictures.html#details
In my experience .125 was a bit high.
FOR ME I wouldn't go below .090.
You can use the search function here for more info.
KoAloha Paul posted some good info about it.
One other thing to note, you can always buy another nut but it is best to do it right the first time.
Take your time and make sure you get your measurements/conversions correct.