How does the beginner figure what seat height is best? Almost fully extended legs or more bend in the knee?
A good bit lower than your bike seat height. It’s what feels comfortable to ride on.
Just go with what you find the most comfortable for you. It’s a personal preference. I like Trials high, street/flatland a little bit lower, Muni pretty low and distance high 
While you are first learning how to ride a high saddle helps you get more weight on the seat and less on the pedals. Once you can get your feet to “float” on the pedals lowering the seat a bit will allow you to hop etc.
What Sask said. The other advisors are thinking in terms of their own riding rather than a more “mature” person just learning. Then you can lower the seat later when you start doing MUni or Trials…
I agree with John and saskatchewanian. If you put the ball of your foot on the pedal, your leg should be almost fully extended when the crank is at 6’oclock.
Not only does it help with weight distribution, but it also is much kinder on your knees than a really low saddle height.
It helps to measure the distance from the crank hole to the top of your saddle once you have it perfect - I find it really helps when I switch between uni’s or in case you accidentally move the seat post.
Is it normal that seat posts need to be cut down on new unicycle for all but the tallest riders?
depends on the seat post
Yes, it’s normal. With bikes, the seat post just disappears into the seat tube no matter how long it is; with unis, there’s a very limited range of adjustment for a given seat post length.
Most posts need to be cut and knees slightly bent for beginners. Once your comfortable riding, seat post height is set by preference and terrain.
Adam