I've never thought them out in that much detail.
I guess I've always measured between the buttonholes--between bottom of one and top of the other. I decide where the top one needs to be and work down from there. I've counted rows between them since that's probably more accurate than measuring. I haven't done that many things that require buttonholes come to think of it, though.
For measuring knitting, I have always measured up to the needle--it's just the way I read how to do it, I guess. Needle sizes vary, and the stitch on the needle is more stretched out than the knitted stitches, so I think this is a good way to go.