davester, i used SM-57 condenser - on axis position.
placed it about 30cm from the amp.
eddie, ofcourse you can plug your podXT into an amp. infact, i plug it into my fender twin reverb and the sound is great (ofcourse an all tube amp helps
in the pod, you can choose whatever you want the pod to "work" with.
you have a "front of combo" setting, incase you want to plug it to your amp, you have studio and direct options.
ofcourse when you plug it direct, the pod uses its amp simulation so recording to your comp wont sound "direct", it will sound like a pro amp and mic were used. when you plug to the amp, the pod remodels all its effects so they will sound good on an actuall open-back amp.
you can use it live with your amps. just dont forget to order the floorborad with it, because when you play live you need fast switching , + the board gives you wah and volume control.
+ you have a whole bunch of pedal models to choose from , such as big muff Pi, MXR compressor, RAT, fuzz, some electro harmonix pedals and what not.
as for settings, ill post it in an hour or so, im not near the pod atm.