The shortest I'll wear is about mid-thigh. A few of my sorority sister go shorter than that often with thongs. If I'm brave enough, I may try that next semester, the guys in my class will be sure to like it!
Personally, I think mid-thigh is the perfect length for any occasion other than an event calling for a longer dress. At that length, a girl will often flash her panties "accidentally" and I think that's one thing designers had in mind when designing the million of styles and colors of panties. That combo of a short skirt and flashing panties ... but not too much, radiates so much sex appeal. So there's no need to be wearing them much shorter unless you're out for other purposes other than just dressing in style, looking beautiful and looking hot.