Chinooker - the short answer is that the selected operating height of the aircraft is a compromise between pilot's references, the ability to attain safe single engine (SSE) flight or commit to a suitable landing area, the winchman's escape route in the event of trying to achieve SSE and the likelihood of worsening the survivor's situation with the downwash.
Ideally the risk is limited by winching the casualty as little as possible but it depends which of the above factors is deemed the most overriding at the time. For training you would aim for 10 -15' over land and 50' over the water - if the winchman goes out above these heights he will initially be on a monkey harness to prove the winch but could then face a 'space walk' with hundreds or thousands of feet of fresh air underneath him if the terrain is difficult.
As for your last line - we try to find out as much info en route but the assessment will be done on scene and a cunning plan hatched to rescue the casualty.