Welcome Soccerman58,
To start with your last question: Using any of the presets makes the sound louder, but the maximum output level remains the same. So you should not need to lower the mixer settings.
Now the big question is: Do you want to use this for live performances, or for post-processing afterwards?
If you want to use it during live performances, you'll need extremely low latency. Stereo Tool always introduces some delay, which may or may not be a problem.
Assuming (please answer if this is the case) that you want:
1. A minimal delay
2. A minimal change in the sound - only the loudness should increase
then you should try the new Stereo Tool version that is currently under development (will be released soon as 3.50):
Winamp DSP plugin:
http://www.stereotool.com/download/dsp_ ... r_BETA.exe
Stand alone version: http://www.stereotool.com/download/ster ... r_BETA.exe
Command line:
http://www.stereotool.com/download/ster ... r_BETA.exe
VST version:
http://www.stereotool.com/download/vst_ ... l_BETA.dll
Use the stand alone version, and enable ASIO support (on the Sound Cards page). Move the Buffer size of the output channel to the minimum value (20 ms I think).
Then, press the RESET button to turn all the processing off. You only need to enable one thing: The "Final Limiter". This will introduce an extra delay of about 30 ms. So in total the delay will be 50 ms (1/20th of a second), which I hope will still be acceptable.
"Final limiter" removes spikes from the signal, _without_ (at least that's the goal) changing the sound.
Make sure that the input level on the sound card stays within limits, otherwise you'll get distortion. For safety, you can for example keep it around 50% of the maximum, and increase the Pre Amp slider to increase the volume before any processing occurs. This will not cause distortion.
For optimal results, set the settings such that the maximum expected input volume * the Pre Amp slider * the Final Limiter volume slider stays below about 3 times the maximum volume. (In other words: If you set the sound card input such that the signal stays below 50%, set Pre Amp to 6.0 and Final Limiter volume to 1.0). Note that louder peaks won't immediately cause huge distortion levels, so you don't need to be very strict here.
By the way: You should lower the output volume (Post Amp) a bit because the output signal might still contain some smaller spikes. You could also enable "Hard Limit" to remove these, but that will cause a bit of extra latency.
Note: play a bit with the Pre Amp slider to see which settings still provide a good sound. This can differ greatly depending on the type of input sound...