I have attached 2 pictures of guitar slant(my view when looking at the guitar). I have always had a view where I could see the entire fretboard as shown here http://imgur.com/LRQLg . After reading several posts( not here, as I have not seen this covered yet. Pebber if you explained this in a video I shall take a razor and cut the top of my forearm..using scalpel technique of course ), this seems to be the view people prefer http://imgur.com/lH6WL

Also when reading music or tab, how do you people divide the time to looking at your hand and reading the music. I try to have my fretting hand up near the book, but I always seem to lose my place. Do you read a measure and then look ? Or are people just good enough to not ever look at their hands ?

Don't concentrate on how you divide the time. Everyone's brain assimilates new information in different ways. You need to figure out which is the best way for you to learn. Do you like to learn a song a bar at a time? If its not complex, maybe a verse at a time? or a chorus? Maybe you like to strum through the basic harmonic structure, and then go back and fill in the blanks.

You are most likely never going to be able to simply sight read ANY piece of music without stopping and thinking and maybe looking at your guitar. Perhaps some pieces though. A good exercise to do is every time you learn a section of music that's say "individual," or stands out as a distinct "flavor," really try to take that concept and apply it in different ways. And when you play it, try to imagine what the sheet music or tab would be.