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We analyze performance of position sensitive detectors such as Position Sensitive Avalanche Photodiodes (PSAPDs) used to readout pixelated scintillation crystal arrays. Crystal identification abilities are determined by analyzing the flood histogram. A good flood histogram has peaks which are as well separated and as narrow as possible since this enables better crystal identification, and ultimately improves spatial resolution. We present a signal conditioning circuit for the readout of PSAPDs and investigate how the tradeoff between the parameters of the signal conditioning circuit components, the PSAPD bias voltage, and the input dynamic range and noise of the preamplifier influence the flood histogram. The signal conditioning circuit involves adding a resistor and a capacitor between the four spatial channels of the detector and the preamplifier. This technique was verified and studied both experimentally and by simulation using PSAPDs coupled to 8 × 8 arrays of 1 mm3 scintillation crystals. Results showed that the flood histogram is not very sensitive to the exact value of the resistor in the signal conditioning circuit, but in general a resistance about twice the sheet resistance of the position sensitive detector is recommended. The capacitor in the signal conditioning circuit should be chosen by taking preamplifier input dynamic range, preamplifier noise, and detector noise into account.