Involute gear teeth are designed to roll over each other, and this rolling follows a 'line of action'(
see this animation). If the spacing isn't set correctly(too tight/too loose) then the teeth will slide/rub causing friction and wear.
The ideal spacing is where the PCD (Pitch Circle Diameter) of a gear is rolling on that of the mating gear(imagine no teeth, so two solid circles rolling on each other:
http://makearchitecture.files.wordpr.../pitchgear.gif).
This has the least friction and least wear, unfortunately it does not have the least backlash.
The correct spacing, from gear centre to gear centre is:
PCD(pinion) + PCD(spur) / 2
The PCD for a metric gear is: N x MOD, where N is the number of teeth and MOD is the pitch(therefore MOD is PCD/N).
The least backlash is obviously where the teeth are fully engaged, however in this case the teeth rub, but they rub on
both sides of the tooth and friction increases substantially. In this case, with no clearance, the tooth crest may also dig into the tooth flank and it may even impact the root.
Without knowing the PCD or MOD, I would set as close as possible without touching both sides. I have used the cigarette paper method since I was a kid(racing RC cars) and it never failed me. Note that different brands of paper have varying thickness and some brands have an extra thin available.
To work out MOD(not perfect, but close enough), measure the outside diameter of the gear (on tooth crests) and divide by the number of teeth +2, eg: gear measures 51mm, has 100 teeth, then 51/102 = 0.5 MOD
All assuming metric gears...