Hello,
1. Normally, the speakers are set to "Small" as to relieve them of playback duties, and to generally make the sound clearer. By setting the speakers to Small, you route low frequencies to the subwoofer, which is able to reach lower frequencies, thus taking the load off of the speakers.
2. I'm not sure I completely understand, but there should be some buttons on the receiver that allow you to set speaker distances in feet, which should sync everything quite well.
3. Set the crossover on the receiver, probably to about 80 hz, which is THX standard. Sometimes, receivers give you the option of setting the crossover for each speaker, in which case you should set the crossover a little lower for your front tower speakers, maybe to 50-60 hz, as they can adequately handle the bass. For the center and the surround speakers, the crossover should be set to 80, as I said before. In order to avoid dual crossover issues, set the subwoofer crossover at the highest possible frequency, which effectively disables it. As for the power settings, I'm not familiar with them, so I will leave that for the other, more educated members.
4. After you fine tweak your system, your speakers and subwoofer should sound much crisper and clearer.