The Speaker Configuration menu is the subwoofer crossover Frequency for each independent speaker set (Front, Center, Surround, and Back) and the crossover should be set based on the capabilities of the speakers.
If you have Line inputs on your sub I would suggest trying a Y-adapter and connecting to the Subwoofers L and R line inputs. I find the bass to be better doing this than with the LFE port. Make sure the crossover on your sub is set higher than your receiver settings as well (which it probably is if you had 120Hz settings on the Yamaha Receiver).
I actually do not watch any TV at all...just use my system for music, movies, and gaming. If I was to watch TV it would probably be in Stereo or Analog Bypass mode. The Dolby Prologic Movie or Dolby Prologic Music mode just isn't as good for bass IMO. If it isn't HD audio I can do without the surround modes. That said, I like the Dolby Prologic Music setting over the Dolby Prologic Movie Setting almost every time if forced to listen to one or the other.