I am sure that real aero-gurus will chime in here, but from what I have read and experienced you want to have the elbows, and hence the pads, as close together as possible to achieve the best aerodynamics. However, let's be realistic here, you need to have good control of the bike while in the aero-position and it needs to be comfortable too.

Go out for a casual one hour ride with variable terrain. Take along some Allan keys and start fiddling with the pad positioning during hard riding, easy riding, up hill, down hill, on corners . . etc . you get the idea. You should be able to figure out what positioning of the pads works best for YOU. Note - this may not be the position that was arrived at via some mathematical calculation or by some fit professional, but this will be the positioning of the pads that is customized for your needs.

---

---

Steve Fleck @stevefleck | Blog

look at john cobb's articles on his page:
http://www.bicyclesports.com/home.aspx
and specificly this article:
http://www.bicyclesports.com/tech/display.aspx?view=114324010203.xml

summary: the least amoutn of drag is when the elbows are as wide as your legs (looking from the front). wider or narrower creates more drag.