1) The ART Tube MP is dog cheap as far as preamps go. Really, you can spend hundreds to thousands of dollars per channel for professional preamps.
2) What I meant by that last paragraph was to make sure that you're not going to clip your input. What I do is leave the line-in volume in the windows recording control (the mixer panel) at about 75% and just leave it there. Then I control the amount of signal I send to the soundcard, making sure that the Recording VU meter in n-Track NEVER clips. A digital signal doesn't clip like an analog signal. A digital clip results in the complete flattening of the signal for the duration of the clip...and is VERY hard on the ears.
3) Entire books can be written on good microphone placement, and none of them will answer your specific question. You have to put the mic where it sounds best. That's all there is to it

A good "trick" is to use your ear as a microphone. Move your head around to determine where the sound is best.
Typically if you're using a dymanic mic like an SM57 in front of your amp, you'll use a technic called "close micing".....which basically means that you get the mic right up close to the amp (2-8"). Pointing the mic at the center of the speaker cone will result in a bassy sound...and moving it out to the edge of the cone will result in a less boomy, thinner sound. The closer the mic the more edgy the sound...the farther the mic the more ambient and natural the sound. Then the mic angle is import...cripes!
Some people like to just drap the mic over the amp so it dangles down in front of the speaker. You'll just have to experiment...there's no magic ratio here.
4) Volume...you should play at the volume where the sound you're getting is the best. You can turn the volume of a track up after it's been recorded and make it loud...but you're losing fidelity.
a) There's something called the Signal to Noise Ratio. The S/N ratio describes the amount of signal vs. the amount of noise in your audio. When you record a low signal, your singal to noise ratio is very small, meaning that there is a lot of noise, and you'll probably hear it. Now when you go into Cool Edit and crank that shit up, you're also increasing the noise level! In fact, the S/N ratio will decrease further and the noise will appear to be worse. However if you record at high levels to begin with, the signal (the good stuff) will greatly outweigh the noise, meaning that will hear less, if any, noise. Plus, you won't have to turn it up much after the fact.
b) In digital terms, you also lose an entire bit of headroom every -6db. So if you record and your peak level is at -13db, you're squashing your signal into 14 bits. This concept is relatively similar to S/N ratio except that there is no noise in a digital signal (NOTE, however, that you will still have to contend with noise, since most of this process is analog!).
Blah! The typical rule of thumb is to record with a peak level above -6db and less than 0db. Basically, shoot for the "yellow" on most VU meters...and never hit the red.
You should do some searching on the BBS here. Check the microphone, newbie, and recording techniques forums.
Good luck.
Slackmaster 2000