"best positioning of the stereo mics, and the mic gain setting"

If you're having trouble with the sound in any mic position, the problem may be the room you are recording in. Either clean it up with sound absorbing material, and make sure some of it can absorb bass (which is hard to do) - or find a big room with a really nice natural acoustic and use that.

Alternatively the suggestion of external mics and close miking may work, but it still needs a non-resonant room for best results.

Mic gain?
Set it so the peaks are 6-12dB below max recording (overload) level.
Lower if you are using 24 bit recording.
You can always boost it later with Audacity, but you can't recover a signal that's gone over the top and been clipped.

Anahata