As some of you know I do a lot of GMing in our group, but I have also been called a rules lawyer from time to time as I have a unique ability to recall many of the games rules verbatim without having to look them up. Over the years I have spent gaming I have found that as a GM this has been a great advantage as it allows for realtively quick decisions to keep the game flowing.
However, I must admit that I have encountered several individuals over the years in various groups that all they do is min-max, and the only enjoyment they get out of the game is creating the unbeatable character who can do everything better than everyone else. On "several" occassions, both as a GM and a Player, I have witnessed and participated in the debates that this thread addresses; as the rules lawyer, the GM, a player agreeing with a rules lawyer, and a player agreeing with the GM. Out of all of these encounters I have learned that listening to all of the interpretations of the rules and then coming up with a compromise is the best.
As a GM I have found that if there is a conflict between players that could totally alter the characters based upon a decision that I make, I try to find what I think is the correct interpretation of the rules, then, if need be to maintain game balance, offer some sort of limitation to bring the game back into balance, a humorous "pop-eye syndrome" or "random die" role etc.
In my opinion, however, the worst thing to do is to ignore the situation. That usually just leads to a pouty player and a lousy gaming session.