You are correct that the farther you get the sway bar angle away from parallel to the ground the more force get transferred to the frame. Does this affect ride quality, maybe if you are getting to extremes on either end. In my case I am pointing up about 25 degrees. I have a rubicon and this insures I don't flip the link when disconnected.

 

As Terry, I agree with your angle theory, but only at extremes.

I have spent a lot of time pissing around with ride quality and sway bars because I had the same ride quality disappointment as you when I installed a 3" sport lift with Falcon 3.3 shocks. In fact I don't run with sway bars at all anymore for normal city driving and the trials. The only time I connect the sway bar now is for the highway (just in case I have to do an emergency swerve to miss a deer or something like that).

My (personal) theory on all this.... the strength of sway bar required is directly related to the spring/shock combo you are using, because after all the sway bar is specifically designed to limit expansion/compression of one side as compared to the other on turns and swerves. I'm pretty sure the stock sway bar installed was specifically designed for the stock spring/shock combo and when you change out the springs/shocks you destroy that relationship.

Long story short, I have come to the conclusion that if you use a heavier spring/shock combo then you need a lighter sway bar because you need less roll control. Conversely, lighter spring/shock combo requires a stiffer sway bar.... and this is all important because sway bars by nature screw up ride quality by limiting the INDEPENDENT interaction between left and right wheel. One side is tied to the other so it can't operate independently in times when it would be better to do so. Instead of one wheel soaking up a bump, the shock ends up being transferred not only to the other end of the axle, but also up into the frame as you mention.

This whole experience has made me look at sway bars very differently... they are evil and cause nothing but ride quality problems! The more you can do to minimize or even eliminate the need for one... the better your ride quality is going to be.
Soooo.... contrary to what others may suggest (and this is just me saying this), if you want a smoother ride in a jeep, then buy a STIFFER spring and shock combo so you can start thinking of getting rid of the REAL ride quality thief.... the sway bar.

As said... with the spring/shock combo I have now... it's pretty stiff, so there is lots of sway control coming just from that combo which has enabled me to COMFORTABLY remove the sway bar and therefore gain a lot of ride quality in the process. With the heavier springs/shock combo, and the removal of the sway bar, I would say my ride is probably slightly better than your average truck

 

While there may be some minor correlation between sway bar angle and ride quality, it would be pretty minor. There are reasons you want your sway bar angle correct, but ride quality isn't really one of them.
If you do the math, the softest the sway bar will be is with the sway bar links at a right angle to the sway bar arms. As you go above that, i.e., the sway bar arms angled up, the sway bar would become slightly harder in effect because the sway bar has to flex / rotate / twist more for a given amount of suspension travel. But that difference would be minor. The further you go, the more difference it would make. But it would always be minor.
But, every little bit can help.

Typically the sway bar arms should be angled up towards the sway bar links somewhere around 10 degrees. Exactly how much can depend on factors like how long your shocks extend. Shocks that can extend further may require your sway bar angle to be more extreme, like TerryC6 has, to keep the addition suspension droop from flipping a sway bar link.

 

While there may be some minor correlation between sway bar angle and ride quality, it would be pretty minor. There are reasons you want your sway bar angle correct, but ride quality isn't really one of them.

This. Plus, FWIW you do not necessarily want to set sway bar angle to level, you want to set it such that the links are long enough that they can't flip or lock up at full extension. If this results in a level sway bar, great, but typically it will end up angled up a bit (usually 10 degrees or less which will have no effect on ride quality.) If you have a lift and set the sway bar level without checking link angle at full extension you will likely end up breaking something.

 

Interesting responses. Maybe the smoother ride is just in my head.
Seemed to be a popular kit, so I presumed the instructions would have noted the possible need for longer links. I should have known all jeeps are different, I'm going to raise the front end when I get home this afternoon and ensure they won't have a chance at binding or flipping.

 

This explains the angle part of this discussion but doesn't "specify angle" simply becasue it is like others have said, are specific to ones needs and current geometry.

As an example, AEV's 2" spacer kit includes new links for the rear and has you reuse the rear OEM links in place of the front OEM links. That angle no my 2016 rig, with back then, a moderately weighted JKU was exactly 11° of sway bar upward angle. My current 2017 AEV 2.5" with Bilstein 5100's, not AEV tuned shocks, is at 9° but is also a much heavier rig. I think it stands to reason "10%" would be the number most would want to aim for?