Hi,
I read somewhere that a subwoofer's low pass filter should be set to 70% of the lowest frequency that your main speakers can operate down to. For example, if your speakers are able to go down to 60hz, you would set the subwoofer's Low pass filter at 42hz, because that is 70% of 60hz. That's what I read anyway, but seems about right.
Level wise, you should try and set it so it sounds 'as if' the low frequencies are coming out of the main speakers. If set to high, you'll notice the sub, and if set too low, the bass will reduce as it hits the lower notes. You just need to find the right level. Sine wave sweep might help you with that.
Room treatment is also important as the room acoustics may create frequency peaks and dips.
Gaz