Hi dennyk - about the shortened grip as opposed to the grip where just the butt of the handle is showing and that is probably about 2in..
Juniors often hold the racket short partly because the handle feels too long and awkward, and they get a better feel with a short handle - try using a racket ball racket and you will see what I mean.
So comparing:

• The longer the lever the more power that can be generated, eg short handled mallet/long handled mallet.
• The swing will be shortened with a shorter lever.
• Because of the short lever it will be easier to control the racket head, and feel it.
• For those stretching to return a ball a shuffle with the grip can give that bit extra coverage.
• Running too close at the back corner or trying to dig out the ball, a shorter handle allows to get into a small space to get the ball. Also means you can drag the ball down the wall instead of boasting, and it catches those who do not watch the ball carefully.
  

I think the idea is to be able to adapt the length according to the situation, and it takes a bit of experience and pracise.
Rodney Martin was one of the champs who really looked like he was choking his racket, but he had superb control, and no doubt if he was a bit slow, could easily adapt accordingly - also he was fit and reasonable height so could cover most shots.
The only thing to watch is the development of a flick rather than a swing, as a shorter handle can  encourages a flick or slap at the ball.

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Don't sell those extra inches short. Sometimes an inch or two extra reach is the difference between staying in the point and not. I am guessing that you will subcounsciously move your hand down the racket over time. But there are a lot of players that 'choke up' on their grip. Check out Mike Corran:

http://www.squashsite.co.uk/2005 pics/squash18.jpg

He's got at least 2 inches from the bottom of his hand to the butt of the racket. Then of course there is Peter Marshall but I suppose he doesn't count cuz he used both hands...

http://www.squashpics.com/topmen/marsh002.htm

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