hunt4570: I would use a soft rest, like a sandbag or a piece of rolled carpet and I would not put the barrel on the rest. I usually place the frame near the front of the trigger guard where the barrel screws into the frame. This should give you a pretty solid rest.
If you rest the barrel it will throw your shots off, especially as the barrel heats up. Also, if leaves your hand(s) without support which leads to what I refer to as 'shooter shake' - that's when I get so much wobble at my end that I can't hold the sights steady at the barrel end (lol).
What you need to do is to set up your rest so you are in the most comfortable position possible so you don't overstress when trying to sight the gun in. I try to sit at the same level as the sights, so I don't have to adjust (I have a Winchester shooting rest with an elevation adjustable rest and it works great for me) and then let the gun shoot to see where it hits.
As for distance - I start at the 25 yd mark and go from there to the max distance I would shoot at a game animal. I have purchased a number of guns from folks who felt they should start at the maximum distances, were never able to hit the target or group the gun, and sold it off after a disappointing couple of boxes of ammo. HTH. Mikey.