Edited to add: Is this the seat you have? http://carseatblog.com/4038/new-safety-1st-complete-air-c...
If so - the 34" height minimum is for using the seat *Forward Facing* - if your son is getting big for his infant seat, he's definitely within the minimum *rear-facing* height for the convertible - hope that helps :-)
A rearfacing seat is outgrown when you reach the weight limit *or* the child has less than 1" of hard plastic shell above the head (see illustration here: http://www.car-seat.org/showthread.php?t=30201). Maximum "Height" limits on a car seat are approximations because it's the *torso* height, not the total height, that determines whether the child has outgrown the seat by height (so if you have a kid who has a lot of height in the torso, he'll outgrow the seat by height sooner than a kid of the exact same overall height who is "leggier").
If you want to know what is "safer" - honestly, he'd be safer in a convertible seat (harnessed seat that can be used rear-facing or forward facing). You don't have to break the bank to get a decent one - here's a link to a certifed Child-Passenger Safety Tech's (CPST's) reviews of convertible seats in the under-$100 range: http://carseatblog.com/10598/a-comparison-of-convertible-...
And here's a link about the AAP recommendations that also contains some helpful car seat suggestions for keeping your child safe even on a budget:
an excerpt from the second link:
"Here are a few different options for keeping your kid as safe as possible through every age and stage:
The “Traditional” Carseat Progression: Infant carseat, rear-facing convertible, same convertible used forward-facing, higher-weight-harness combination seat used with 5-point harness, same combination seat used without the harness in booster mode, backless booster.
The ”Fewest Number of Carseat Purchases” Progression: Higher-weight-harness convertible seat used rear-facing from birth, same seat used forward-facing to max weight or height, dual mode dedicated booster
The “I don’t have a lot of money but I still want to keep my kid as safe as possible” Progression: Skip the infant seat. Use Cosco Scenera or Evenflo Tribute convertible from birth (around $50). Use convertible forward-facing when rear-facing limits are reached. When outgrown switch to Evenflo Maestro combination seat ($80). Use Maestro with 5-point harness until outgrown then switch to booster mode and continue using the seat as a booster until outgrown. This seat isn’t very tall in booster mode since it isn’t height adjustable but once it’s outgrown you can just buy a backless booster (around $20) until your child reaches 4′ 9″ tall and passes The 5-Step Test. Total cost from birth to seatbelt: About $150
As I have tried to demonstrate – you have lots of options and you don’t have to sacrifice safety just because you’re on a tight budget or can’t afford $250 for a single carseat. The main message here is not to rush each stage. Keep kids rear-facing for as long as possible, once they’re forward-facing keep them in a 5-point harness to the limits of the seat, use booster seats longer and learn how to determine when it’s really safe for your child to transition just to the adult seatbelt. Last but not least – keep your tweens and younger kids out of the front seat if there’s an available seatbelt for them to use in the back seat."