The most important thing that Audyssey does, perhaps the ONLY important thing, is dialing down ringing tones.
All the other stuff, distance, levels, etc, you can easily do yourself. Feel free to change settings, as Audyssey's EQ engaged should still be helping.
I have to admit, those are some pretty high xover points. I suppose HTIB speakers can be very small, but if you don't happen to crank it too loud or too often, I'd probably dial them down.
Forget double bass in your situation.
for i-pod, you already answered your question. "preferred" listening mode. Me? I prefer stereo as stereo.
If you wanted a much more thorough explanation of things, here is the
705 FAQ. Its pretty comprehensive, to say the least. Not all things will apply to you, but a lot of it just might. I don't have a 705 either, but I've used it myself as an 805 owner before.