Homedad, if there is a bypass option, then yes you want to use that....however, most subs don't have a bypass option, so you want to turn the sub x-over clockwise to the highest position to get it out of the way, and let the receiver setting manage the crossover.
I always left my 350 volume on about 11-12 o'clock position. I believe most people start around 10-11 o'clock, then run the calibration tests on the receiver OR use a Radio Shack SPL meter and calibrate to 75dB's or so for all speakers.
On the receiver try all speakers set to small, sub to Yes, and an 80hz crossover.
Keep in mind most CD music is not going to produce a lot of low LFE. Have you tried a good action movie with lots of LFE? Also, what is your dB level on your receiver for the sub channel. With my sub set to the 11 o'clock position, the Denon would be around 0dB's on the channel to achieve 75dB SPL.
ps: now that I have a 500, it is a whole new story.