Jim Ross,
Let me start by saying I would not ever tow with the PoD on anything by 99, I don't think its the safe or prudent thing to do. The reason you probably saw 2. 5 mpg increase towing on economy is you were making less power than stock with the PoD at 70, really only putting a max of about 500 ft/lbs to the ground, or less.
You have an automatic, so based on majority info your best mileage will be obtained on SW3 (Performance), Timing (TM) 4, and Torque (TQ) 2. This will, however, yield you the most smoke and soot in your oil, even with an Amsoil bypass you will probably overload your oil with soot long before the oil is worn out (at least this happens for me on TM4). The next best setting would be TM2, which is also default. Slightly less economy (about . 5 for my manual), but less soot, smoke, and 50* higher EGT's.
For towing you will probably see the best mileage on SW1 (Economy) TM2, TQ2 (again TM4 would be a bit better, but I don't recommend it for folks using extended oil drain intervals). I beleive this for the simple reason that power takes fuel, and more fuel drops economy. So if your using 350 rwhp to pull a pass at 75mph you will burn more fuel than using 250 rwhp to pull it at 55 mph. If you drive speed the same regardless of power (Like we have to on many of the Idaho roads) then you will probably see a little better economy on SW2 (Towing) due to the quicker spool from a get go, and the ability to use higher gears sooner. . but thats all subject to your right foot, trailer size, weight, etc.