= Hammer on Pull off exercise, fingers 1 & 2 2 & 3 3 & 4 etc....

So most people know this exercise. my question is this: when hammering or pulling on fingers 3 & 4, should fingers 1 and 2 be on the lower two frets and be pushed down or does this totally ruin the idea of the exercise?

Totally ruins the idea. Guitar playing is as much about not making unnecessary effort as it is about making effort in the correct ways.

How many combinations did you mean by etc, btw?
Sure, but don't forget that a lot of the time the difficulty is the co-ordination of all four fingers - don't forget the 3 finger and 4 finger combinations. And all the slides, obviously.
i have no idea what you are referring to? is this just a chromatic exerciese you are talking about?