Maurice is right on, Dan. I use the 3 (firmest propedal) setting as a sort of "lock out" when pedaling on pavement, long flats, or really long smooth climbs. On the trail, I generally leave propedal off completely.
I guess if I was racing some place smooth and fast, I'd dial in the propedal somewhere in-between and leave it on. But for regular trail riding on rocky trails, I don't use it. The VPP suspension design naturally uses chain tension to counteract pedal bob, so propedal is a bit redundant.