As far as the 4 position "Dampening" switch, it is all up to personal comfort level. A setting of 1 is the mushiest, and a setting of 4 is the firmest from what I remember. That control is all about the "response time" of the rear shock, not the shock air pressure control. There is only a slight and almost undetectable difference in the settings with the same shock air pressure and is entirely up to your own riding style and preferences. I kept mine at a 2.
Rear air pressure is going to do two things, make the rear shock either sluggish with low pressure or really stiff with a lot of pressure I recommend at least 40 lbs but you may be happier closer to 60 lbs. I ran my fronts around 12 lbs, and the front pressure will also make the bike taller with increased pressure. Do not exceed 17 lbs as you will most likely blow out a fork seal!! Once again it is all up to your personal riding style and preferences.
Most important, as already pointed out, used only a hand pump for adjusting your pressures, it is all about the volume, not the pressure when pumping them up.You want to use a small hand pump so you do not deliver a huge volume of air at once into the relatively small area that actually gets air...