Not sure blacker-than-black is *necessarily* related to where you set contrast, but choosing the level past which you no longer see flashing (235? 240? higher?) is an interesting question and it has been discussed forever here on AVS.
For an expert's opinion, see post 2347 in this thread. http://www.avsforum.com/avs-vb/showp...postcount=2347
Also this was discussed at length in the following thread, starting a few pages in. Page 11 is a typical page:http://www.avsforum.com/avs-vb/showt...240153&page=11
My takeaway: I set it so I can't see blinking over 240. The difference between 235 and 240 is minimal. But if you can see 254 blinking you're probably giving up a little dynamic range for no real reason.
(Further upstream in the video chain, I accept you want to preserve *any* information you can, but we are talking about setting the controls of your display, the last link in the chain, where your choice is being able to discern the occasional stray pixel at 254 vs. having a brighter picture: I'll take brighter picture. The point of the above discussions was there just isn't that much real content that lives over 240 by the time it gets to the display.)