WP Smart Image 2 please help!

Hi there,

I feel like an idiot, I am at a total loss with this plugin, usually I would go to the plugin site and get all the info I need to try and get it up and running and find out what info needs to go in the settings fields.
But I am having trouble with that and I can’t see any info on the support forums here either, so here goes:

Can someone please help me with the info that needs to go in the settings tabs, particularly the general settings and the default images.

In the general settings:
In the advanced settings should I have html or xhtml? [edit- never mind I have since worked this one out]
(I am running WP 3.3 @ http://www.eatsleepmove.com.au)

In the default images:
what should I have in the default image path? Is it the info for my media library?
should I have the top box checked or not?

Do I need to save my images to a different spot?

where in my post editing should I see the options for images? [edit – ok, found it, but there are question marks where the images should be…?)

which option should I choose for the feed and why?

Thankyou to anyone who takes the time to answer all of these questions, my sincere gratitude in advance!

Cheers, Crystal