What I've learned so far:
You have 3 eq stages. A pre-amp eq, whatever goes into the amp. Could be just the guitar's natural sound, or any eq effects applied to make it sound different. Cheap guitar? No problem, just EQ it and you'll survive. I typically use the 4 band shift to brighten up the signal and increase either upper or lower mids for a tad more volume. The update 2.01 'mic preamp' thingo is also great for this stage, get to that later.
Next you have the amp controls. Gain (chug, breakup), bass (thickness, muddiness), mids (honk, frequency response), treble (spikiness / gain), presence (brightness, anti-mud), master (power, richness, alternate breakup). Amp parameters beyond that affect feel and response instead of EQ. Consult meambobbo's articles *and* the advanced manuals put up by line6 on the subjects, they seem to contain different ways of looking at the subjects.
Last is Post EQ. This is where you actually EQ the sound you hear. Up to this point you've been changing amp characteristics. Low bass settings on the amp can be compensated for now, where you can add a post processing EQ and increase the bass range. Watch the Petrucci tone interview thing (part 2) on youtube for a good explanation of things to this point. Part one is great as well for making clean/crunch tones but I honestly don't agree with his philosophy on cleans. Preference is all.
For HD300/HD400 users, we clearly suck because we don't have money, and we don't deserve more than 2 (post update, 3?) EQ effects.
For what it's worth I prefer the 4 band shift EQ, due to it having 4 bands, and a shift. Without a central mid frequency it's really not a good replacement for a real eq pedal however. (Honestly, just buy a cheap Danelectro Fish and Chips 7 band EQ pedal to put between your pod and the amp. Also opens up the FX1 channel. Doing this has been the single biggest factor in my tone modeling since the pod itself.)
Parametric's been adaquetly described. Gain up or down from a neutral 50%, and the Q setting to change how wide the 'V shape' you make is.
Post the 2.01 update we get a mic preamp thing that I don't think is actually meant for electric guitar, but it's amazing anyway. Filters out bass/low mid frequencies and has a bass and treble control, making it perfect for brightening up a guitar. Makes my $100 dollar fender tuned to A sound like it's actually worth something, and doesn't hold me back when playing to Delain (recommend) or other artists that use 7 string guitars.