The idea of altitude training is to increase the number of red blood cells, which will increase the amount of oxygen that can be delivered to the muscles, which will allow you to maintain a higher workload (i.e. run faster).
The increase in red blood cells occurs as a result of the body's natural adaptation to the thin air at altitude. It all sounds very nice and lots of athletes do it but it may not be all it is cracked up to be. Due to the thin air at altitude it is impossible to train at the same pace as you would at sea level which means that your running will deteriorate due to the progression, overload, and reversibility principles. The deterioration in your running and the increase in oxygen carrying ability of the blood tend to cancel each other out, many researchers have found no improvement in run times following altitude training. However there is an up side, more recent research has shown that living at altitude and training at sea level does improve run times. This method allows the body to make the necessary adaptations to altitude, but more importantly allows athletes to train at normal pace.
The recommended altitude is between 1500 and 3000m
Many training schedules quote percentages of VO2 MAX as the intensity to work at. The table below gives an approximate conversion of %MHR (maximum heart rate) to %VO2 MAX. Your MHR is approximately 220- (your age in years).