A neutral position means the rider is balanced over the bike, with weight on both wheels, and is ready to respond to any need for quick braking, turning, and other maneuvers. The arms and legs are loose, to act as suspension, an important aspect of "bike-body separation." This neutral stance is the foundation for mastering skills such as skinnies, jumps, logs, and stunts as well as enjoying riding rocky, rooty, technical trails.
Relaxed Hands and Arms
In the neutral body position, hands are lightly touching the handlebars, with one finger of each hand ready to brake. Arms and hands are relaxed, with arms slightly bent, to better absorb bumps, curves, and logs. This loose position places less stress on hand nerves and shoulder muscles. A light grip also means better bike handling as the rider whips over roots and obstacles.
Legs and Feet, the Built-in Suspension System
Like the arms, the legs are relaxed and slightly bent, ready to act as a built-in suspension system and give the upper body a smooth ride, no matter how rough the trail. This stance is sometimes referred to as "cowboy style," which probably sounds a bit better than "bow-legged," which is what it describes.
Weight is on the feet, not on the butt and bike seat. Hover over the bike seat; don't sit on it. Of course, you may want to sit when when riding non-technical stretches. But think of the saddle not as a seat but as a point of contact to help control the bike, along with the handlebars and pedals.
When not pedaling, pedals are level, with one foot at three o'clock and the other at nine o'clock. Most riders prefer to have their "power foot" forward, but advanced riders may wish to practice alternating their feet in this position, so either foot is able to act as the power foot.
Keep your eyes focused forward, scanning where you want to go. Don't look at the tree or down the cliff – where you don't want to go.
Up and Down Hills
The weight distribution changes as the bike moves from a flat to an uphill surface. The front wheel naturally unweights as the bike points up hill. Counteract this and keep the front wheel's traction by moving body weight forward. Lower shoulders over the handlebars by bending elbows more. The steeper the incline, the greater the body position is forward and low.
Similarly, the back wheel tends to unweight and lose traction when descending. Move the body weight back to counteract this. On a steep descent, the butt may be totally behind the bike seat and hovering above the back tire.
Riders also shift their weight front and back for an even weight distribution as they glide up and over obstacles.
Here's a video discussing this and another that is particularly about position on hills.
Cone of Movement or Ready Position
This stance is also called the "cone of movement", with the head the top of the cone. From this position, the rider can move back to make the front end lighter, for descending, or forward to make the back wheel lighter, for riding uphill. Or laterally, for turns and to avoid objects.
It's also called the "ready position," denoting the rider's readiness for whatever may await her around the next curve. With her body positioned loosely over the bike in this neutral position, the bike flows beneath the rider, so she can stay on her bike riding technical trails that much longer.