How close the light needs to be is the same principal as all other lights which is as close as possible only you need to be more carefull.
Take a standard non digital thermometer & hold it within 2 inches of the canopy of the plants,then lower the light until the temp reaches 80 degrees,thats where you'll want your light,by keeping the thermometer 2 inches higher than the canopy you allow room to grow without scorching.
Keep the thermometer hung from the light & you'll see when the light is getting too close then raise it up until once again the temps are 80 degrees.
As for how many plants that question is pretty much unanswerable,too many variables apply,the reccomended grow area for a 400 watt hid with a reflector is a 3x3 area but if you rotate the plants daily ive found you can increase the area to a 4x4 area.
Going from floro's to hid lights you'll see a big difference in the brightness of the room,dont be tempted to overshoot the grow area,keep it within a 4x4 area max & you'll get awesome results.
huh?