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If I follow the Paradigm instructions and set sub volume to about midway, it seems like half of the sub volume will never be used.
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Volume and gain are two different things. A gain knob controls the amount of gain (power) delivered by an amplifier. A volume knob controls the level of the input to the amplifier. The servo-15 has a volume knob, not a gain knob.
Let's assume that the sub can reproduce a signal at a maximum level of 100 (mystical units). If a signal arrived at the sub that required a level of 105, it would only play at 100 (compression). When you adjust the gain, you control the maximum level (assuming the driver can handle the power). When you adjust the volume knob, you control the level of the signal entering the amp. In other words, cranking the volume up to full on the sub could compress the signal (i.e. everything would be loud, not to mention poorly calibrated). Incidentally, this is one reason people get better subwoofers... more headroom and less compression (distortion) at high SPLs.
However, the X-30 is another volume control in your signal path (along with the level settings and volume control in your receiver). The sub's amp will receive the sum of each volume control (cut at X-30, boosted at sub, etc.). It's considered ideal to have all volume settings near a middle setting because the extremes are not as controlled.
In summary, follow Paradigm's suggestion. If you like more bass in your movies, boost the sub level for the DVD mode in your receiver.