Launch rod length is about giving your model rocket enough distance to accelerate to safe flying speed while it is still restrained by the launch rod.
If it is a day with no wind you can use a slightly shorter launch rod. If it is a gusty, windy day you will need a significantly longer launch rod. The NAR recently published a report on safe launch operations that explains how all this works under various cross-wind conditions.
Using the impulse-classification of the motor gives you a very general guide but what you really need to know is the rocket's speed at the end of the launch rod (or rail). The weight and drag of the rocket will obviously have an influence on this speed. You may need to use some flight simulation software, or do a few calculations of your own. This sort of thing is fairly easy to program on an EXCEL spreadsheet.
Launch rod diameter should be as big as you can tolerate. The larger diameter makes the launch rod more sturdy and stiff, and reduces the amount of sway and bending that you get on a windy day. The straight launch rod is just as important as the length. If you use a 1/8 inch launch rod with a heavy model rocket on a gusty day, the rocket might reach the end of the launch rod while it has bent all the way in one direction and is bouncing/swaying back, and the moving tip of the launch rod can turn the rocket (in unpredictable directions) as it separates.
No, I am not telling you to use a 25mm diameter launch rod for A- or B-powered rockets. The launch lug would be bigger than the rocket? Such a large launch rod would be over-kill.
Yes, 1/8 inch (approximately 4 mm) will work for small, light model rockets but it would be better to use 3/16 or 1/4 (approximately 8 mm) for heavier rockets. This would include almost all model rockets powered by D, E, or F motors, and possibly even some rockets powered by C motors. Remember, if you build using 1/4 inch launch lugs, they will always fit on a 1/8 inch rod, but if you build with 1/8 inch launch lugs and need a bigger launch rod on a windy day, you might not be able to launch at all.
And for heavier model rockets (probably some E-powered designs, and many F-powered rockets) you should probably use a rail system. These are much much more stiff and will give your rocket excellent directional control while it is on the launcher. The same length rules apply to rails; that is, the rail needs to be long enough to let the rocket reach safe flying speed.
I do not happen to like the Estes launch rods, for a couple reasons. They are good for beginners, and they usually work if you don't have any other rod material available, but that's about it. The two-piece construction has a joint in the middle that usually makes one half of the rod slightly mis-aligned with the other half (cheap parts) and can snag the rocket and slow it down in the middle of launch. The joint is also a weak point where these Estes rods have a tendency to break. When assembled, the Estes launch rod is only about 31 inches long. And if you try to purchase a replacement, they are ridiculously over-priced.
Go to your local hardware or building supply store and look for an assortment of round rod in various diameters and lengths. You can buy a one-piece rod made from solid steel that is 1/8 inch diameter and a full three feet long for a buck-n-a-half, and you can buy a four foot length for only a little more. (Yes, I know he's in Bulgaria, and they don't use inches or dollars.) Or, if the 1/8 is too flexible (and it is, in a four-foot length), you can usually find larger diameters that are still not expensive. If you clean off the motor residue at the end of the day, and keep the rod clean and lightly oiled, it will last a long time.