I have been recently fit at my LBS so I am going to assume that my saddle position with regard to height and fore/aft is accurate, however I have had a couple of riding friends suggest that I look like I'm reaching too far for the handlebars. My question is, when I am in the hoods, should my arms be almost straight but slightly bent at the elbows or should the position have me almost bending my elbows such that my upper arm and forearm are at a 90 degree angle...or somewhere in between. I don't feel uncomfortable with my arms almost straight but I'm being told that it will eventually cause neck and shoulder strain and be a tiring position for longer rides..any input would be appreciated...

they should have the more bend than straight. it's closer to your second suggestion. questions you have to answer. How much weight is on your hands? While riding in a big gear can you let go of the bars and not fall forward? does any part of your hands go numb? does your shoulder hurt after a 20 mile ride? the next day? It isn't to usual to see someone riding with a less than a 10 cm stem or stem flipped for a high rise to reduce reach. This is real common on small frames, 52 or less.

Sometimes getting fit at a LBS assumes the recommended settings for your size and reach. All riders are different. You might still have to make minor adjustments so you feel comfortable. Trust what makes you feel good, not what someone says should be good.

Adjust till it feels comfy not to make it look cool. So its not common to see people with stems shorter than 10cm but if you need a shorter one to make your ride more comfortable do it. If you were fitted by your LBS take the bike back and get refitted with a shorter stem to help with the reach problem.

When riding on the hoods, there is no reason to have any significant bend in the arms, unless you want to get into a more aerdynamic position. The arms should not be locked out, though. Watch any pro bike race, where the peloton is just cruising along. You won't see many bent arms. Most will be farily straight, but relaxed.

Pay no attention to what you friends tell you will happen, ride the bike and find out.

I do have a functional test for adequate stem length. When I'm riding with my hands in the hooks and my upper back is nearly horizontal, I want enough stem length to keep my arms and knees from touching. If your bike is setup in a beginner's position, with a small drop from the saddle to the top of the bars, you might have to bend your arms a lot to get the upper back very low. That will cause arm to knee interference pretty quickly. I can bend my arms and cause interference, but I have the bars 9-10cm below the saddle, so I don't need to bend my arms very much to get fairly low.