1. Yes, the top knob is volume and the other is tone. 2. the three way switch changes the pickups. With a 3 way I'm guessing you have two pickups. One position will be for the forwardmost pickup. The middle will combine the two, and the third will be the pickup to the rear of the guitar. The pickup to the rear will hum the loudest. People usually use that one for the heavily distorted songs. 3. Electric guitars hum. In varying degrees. If its too loud there could be a problem but I'll bet your standing directly in front of your amp, facing it, with the distortion on. Stand to the side of it with the amp set behind you and it will be a lot less. Your guitar is picking up a little hum from your amp, sending that little hum back to the amp boosting it through the speaker. If it gets to much you will get feedback. 3. For your amp, volume is volume. Gain is the amount of distortion, set it on 1 to get a clean sounding guitar. set it on 10 to get metal mayhem. When you change the gain you may have to adjust the volume. The bass mid and treble are your equalizer. Set them all at 5 and give your guitar a strum. If it sounds bassy or muddy you will want to add treble. If it sounds to bright or high pitched you will want to add some bass. There are NO settings. Its all done by ear. What may sound good to some people may not work for you. You may get your amp set up perfectly, go eat a sandwich and come back and it will be all wrong. Its all by personal preference. Hope that helps, Good luck.