If you aren't using the amp modeling (or using amps without the speaker modeling) the output mode won't matter. I'm currently using studio mode.
The key thing to getting it dialed in is to compare levels/gain with and without the Pod as much as possible. If you are using the method from Jim's post on the JVM forum above then what I would do is first get the levels dialed in for the front of your amp and then move on to the FX loop.
Plug in your guitar into the Pod, then plug in the FX send cable into the input of your amp. Add the FX loop block in your preset. Add the Studio EQ in front the FX loop with +6db of gain. That is your starting point. Ideally this should sound the same as plugging your guitar directly into the amp. Try the clean channel of your amp, is the volume the same? If it's quieter through the Pod try turning the gain on the EQ pedal up a little bit to match. If it is louder try turning it down a little. You may also want to play with the guitar input pad switch. Once you get this matched, save it and then move on to the FX loop.
With the FX loop it a similar deal, try to get it to be the same sound with and without the POD - if your amp has an FX loop switch this is a little easier as you can just flip the switch vs unplugging a bunch of cables. For my amp (Mesa Rectoverb 25) I found setting the 1/4 output to amp and leaving the mixer at 0 (path 1 panned center with path 2 muted) and the master output knob at max matched the general output well. If this doesn't work well for your amp flip the 1/4 output switch to line (be careful it will be loud!) and then adjust the mixer output level until it matches the level with the fx loop off.
Hope that helps!