Attacking from the flanks or behind a target may increase the likelihood of a critical hit, but does not appear to increase damage (this positional damage may have been taken out or never existed, according to recent tests by Deford).
Attacking from an elevated position has a greater likelihood of hitting the head. It also has a greater likelihood of garnering a critical hit and gives a small damage bonus, although it is not known whether or not this is due to hitting the head or a bonus inherent to superior position. Being above your target increases your range somewhat.
Attacking from a lower position has a greater likelihood of hitting the legs and feet. No damage bonuses are known for this position. Being lower than your target reduces your range somewhat.