First of all, use the "Plain quoted text beginning with '>' is displayed with" panel (couldn't Netscape hire a writer to make that a little less wordy?) to change the style of quoted text. Do it. Make quoted text smaller, or pink or italic...or something. Setting quoted text apart from other message text makes reading messages so much easier.
You can display messages in a fixed-width or proportional font. To each his own, but I prefer fixed-width so I can make sense out of all the ASCII art that my so-called friends keep sending me. Variable fonts can be easier to read, though, if the messages you receive don't have columnar text, ASCII graphics or other funky formatting.
The "Reuse message window" and "Reuse message list window" checkboxes allow you to control the overpopulation of windows on your screen. If you prefer windows to stay there until you close them yourself, leave the boxes unchecked. If you're a clutter-hater, check them both and don't look back.
Click the plus (or arrow) to reveal a gaggle of panels within Mail and Groups: Identity, Messages, Mail Server, Groups Server and Directory.
This panel is also where Communicator hides the tools for creating a signature file (a tagline that is automatically appended to all of the e-mail and newsgroup messages that you send) and signature card (a hinky Communicator-only feature that could be cool if it was also available on every other e-mail client in the world. But it's not -- it's not even available in the Mac version of Communicator). Create a signature file for sure, don't worry about a signature card unless you're just looking for a way to avoid getting something useful done.
If you're using a Mac, there's a checkbox there: "Use Internet Config". The Internet Configuration System was designed to make your life easier by reducing the number of times that you need to enter your preferences into each of your Internet clients. It's worth using. You can get the latest version of Internet Config from ftp://ftp.share.com/internet-configuration/InternetConfig1.4.sit. The online documentation is at http://www.quinn.echidna.id.au/Quinn/Config/.
The "Copies of outgoing messages" area provides several ways to automatically store copies of the correspondence that you send. You can ask Communicator to automatically e-mail a copy of each e-mail message and newsgroup posting. If you click "Self", that copy will end up in your in-box -- or you can have your missives sent to another e-mail address.
The other way to save messages is to have Communicator stash a copy in a Message Center folder. This is my preferred method -- I suggest creating two folders called "Sent Messages" and "Sent Newsgroup Posts". Then use this preferences panel to make the program stash your missives in the appropriate folders.
Before you get off the phone with your ISP, ask them about your newsgroup server, because the Groups Server panel is the place to set that up. The news server's hostname goes in the "Discussion groups (news) server" field. Its port number goes in the port field, but I'll bet you dollars to doughnuts that it's the default of 119 (or 563 if you have a secure news server).
If you've using a slow Net connection, you may want to lower the number in the "Ask me when downloading more than...messages" field. Then again, if you're connection is speedy or you just hate to miss a single posting to alt.sex.fox.mulder, you can bump this number up.
If you have a permanent network connection, select Online Work Mode. This allows Communicator to send and receive information at any time. Modem users who are watching the clock may prefer Offline Work Mode or Ask Me mode. Offline Work Mode will prevent Communicator from opening a network connection when you start the application. You can begin your work offline -- composing e-mail messages and newsgroup postings, for example. Communicator will hold the messages until you connect by choosing Go Online from the File menu.
Ask Me mode gives you the option of connecting each time you start Communicator. When you launch the program, you'll see a dialog box asking whether you want to be online of offline. To change this later, simply choose Go Offline or Go Online from the File menu.