Stopped by the local gaming store last night, and was immediately drawn towards the 40k table to help resolve a rules question...
Anyway, I know that the model size, and line of sight question comes up a lot, and was reminded when there was some bickeering over the size of a piece of non-area terrain (which i pointed out doesn't have a size because it is non-area terrain)
So here is my suggestion, from now on size 1 is up to 1" above the table, size 2 is more than 1, but less than 3", size 2 is more than 3, and less than 5, and so on.
Now go over to the handy bass wood display featured in many hobby shops (and coincidentally gaming stores) and pick up a 1 inch wide piece, a 3 inch wide piece, and a five inch wide piece. When in doubt, place the appropriate piece of wood behind the model, if the line of sight passes over the model's base, but hits the piece of wood, sight is blocked. We always use a cheap laser pointer for determining line of sight (less than 3$ on the impulse rack at wal-mart), so it is easy.
But wait, i don't want to spend money for the wood you cry... what do we have laying around that would work... Wait a sec, by picking those sizes, we can use a standard base, an blast marker, or an ordnance marker instead of the bass wood. Wouldn't be as easy for area terrain, but still would work.
And finally, from where does the line of sight start for a model? Well for a size 1 model, it would be questionable but do people really argue the line of sight of nurglings or scarabs, for a size 2 model it would be the hole in the center of a blast marker, for a size 3 model, the hole in the center of an ordnance marker. A brash generalization, but not a bad one.
And finally, make size a creature stat, for clarity. Everything would be size 2, unless specified otherwise, so you only have a few units to pick out.
All together, clean and concise (IMHO). Size 2 area terrain is this tall, size 3 area terrain that tall, size 4 or 5 or 6 or 7 could be specified by the number of inches off the table you place the ordnance marker (if this ever comes up).