Air pressure adjustment from compressor ?

I usually adjust mine when the air is flowing.

I tried to do it when it wasn't and a couple times it stopped flowing on me.

So it not a silly question. The only silly question is the one not asked

Nope, not a silly question at all.

People do it both ways. It doesn't really matter since it's just a reference, what matters is that you do it the same way each time. Static pressure will be a little higher than when air is flowing so I usually adjust mine when air is flowing..

like scott says, its really up to you, i do it when the air is flowing because the needle on my regulator indicates about a 5 pound drop when i start the flow. thats my regulator though, other ones may not do that. later.

Mine has any where from 5 to 10 psi drop so Ill set it air off at first then fine tune with it flowing.