The lower the zdepth, the closer it is to the camera. So, if you have an enemy or player sprite and a forest, you have to set it to lower than the tree sprites to show the enemy in front. But really I think you'd end up wanting layers, it'll look cool, and let you have some neat parallax effects.
I would suggest setting a virtual playfield of say, 100 deep, add in some buffer to allow score displays etc to take precedence. So, say your playfield goes from 10 to 110, with 10 being quite close to the camera, maybe 20 is the zdepth that you want the player. If you use the zlayer as a factor in scaling the sprites and their scroll speed, well sprites with a higher zdepth value should be smaller and scroll slower. Any trees that are set <20 will be in front of the player, anything >20 is behind the player. I think it's better to consider the playfield as a virtual 3D layered stage for your game, like one of those puppet stages with the cutout characters and stuff - don't see it as just a number you have to get right, see it as a way to control sprite ordering and introduce parallax backdrops.
I actually did something similar to this for a menu in a game myself and Cliff M are making - drew a few layers of trees, and a few layers of fog - got the fog layers scrolling gently, and the trees scrolling in a parallax playfield type thing. It's very effective, layering the fog especially makes it look very organic.
I would suggest having your own Z depth value, and work out the scrolling speed, scale, as well as the zdepth from that, then you can adjust it until your happy with the speeds and scaling etc quite easily.
I got a fever, and the only prescription, is more memes.
