For up to Dolby Digital and DTS, there is no difference, none. Now when they start broadcasting Dolby TrueHD, it'll be a different story, but that day will probably never come.
The settings on those speakers are for the crossover. You should probably read up on the guides posted here:
http://www.hometheatershack.com/foru...ter-101-a.html
But the short version goes like this (please forgive me is I sound elementary or patronizing, that's not my intention).
In the very basic, Frequency measure in Hertz goes like this. Low bass sounds are heard from about 200HZ down, Mid range goes from 200-1000, and 1000 on up to 20,000, or 20K is treble (these ranges are made up by me and are not hard and fast by any means).
So, those crossover setting in your AVR determine what frequencies are handles by your Main speakers, and what frequencies are handled by your subwoofer. In otherwords, if your crossover is set to 100HZ, and a 200HZ sound comes through, it will be played by your mains. If a 50HZ sound comes through, it will be played by your subwoofer.
So, what you want to do is look at the specs of your speakers (check the manual for your speakers). They will have a spec called frequency response which will read something like: 120hz - 20,000hz +/- 3db. Your sub will have a similar figure, probably something like 30hz-180hz +/- 3db. What you want to do is set the crossover so that it falls within both of those ranges, in this case, 150hz would be a good choice.
Now to the second part of your question. Each of your speaker channels, LCRS, has a level, or volume setting. You need to go out to Radioshack, buy an analog SPL meter, and then sit in your chair with the SPL meter on to the 70 range. Hold itup by your head, pointed at the intersection of your ceiling and front wall, and push the button on your AVR's remote labeled "test tones". Static (pink noise, actually) will start coming through your speakers, first from the Left, then center, then right...
Turn up the volume until all the speakers measure about 75db. Then, using the individua setting from -12db to +12db, change the vlume of each individual speaker until each reads exactly 75db.
Press the test tone button again, and the pink noise will stop. Then you're done.
If your AVR has some sort of auto setting with an included microphone, just run that, but I always like to double check the setting it chooses for my crossovers and channel levels.