I used to run a 2006 Wolf Ridge with the same travel adjust feature.
I used to set the sag at approx. 20% in the 4 inch setting (this gave it a nice 'platform' for climbing), when placed into the 6 inch setting it was then really plush. It would only bottom out occasionally in the 6 inch setting.
EDIT: I was under the impression that you were supposed to set it up in the shorter travel setting as the adjustment feature was intended as 'on the fly' change to suit ascending and descending. At least thats what i did and it worked well. Short=Steep angles/shorter wheelbase and Long=Slacker angles/longer wheelbase.
ANOTHER EDIT!: How come you have an RP23? My 2006 had a RP3 and my 2007 an RP23. If you bought the shock, it may need re-valving to suit the bike???