excellent replies. LaRue had a very easy to read "article" on Parallax in their recent catalog. Some facts that I have found helpful (much has been said above):
1) spend the time, once a year to focus your diopter. This takes time. Focus the reticle ONLY. Focus once, put it down, and give it a quick glance, then focus again. Repeat. Best to look at a white sheet of paper. Focus on high power and low power. If you can do this under 2 minutes, you are not doing it correctly. Do it over. Younger eyes are more forgiving, and thus the focus needs to be done more. Those over 40, less repeats.
2) the yardage on the parallax knob is relative, and most often a very (very) rough reference.
3) If you did #1 correctly, then parallax can be seen as the "focus" of the target, so use the left knob to focus the target. If you do this, you are 90% there.
4) finally, see if moving your head slightly, while on a target, if the center moves off the target. If it does, fine tune the parallax knob, until it does not. If you do this, and go back to #3, and still the target moves off the center, you have a bad scope.
5) even with a bad scope (in combat, you cannot return for warranty repair), put the scope forward, until the eye ring shadow appears. Then center find the target, on the reticle, with the shadows even around the eyepiece. Now, shoot.
Good luck.