Sorry for the tardy reply, i was away.
Yes, there is a very noticeable difference in sound between method one and two.
I prefer to use my sub only for lower end oomph. I don't like the sound of the sub for music compared to the tighter bass of the M60s which is why i leave my M60s set to 'large' and then use the sub crossover control instead of the receiver cross to blend the M60s with the sub at the lower frequencies. I found in my listening room that a cross of 50Hz works really well in integrating my M60s with the EP350 sub. If i set the cross too much higher, the lower end sound begins to become 'muddy' as the M60 sound waves interfere too much with the subwoofer sound waves causing sonic nastyness.
Again, try both methods using music or soundtracks as your reference and see what sounds best to you.
