Hi Dave,
Here is an easy test to see what THR level you should use.
First, set the SLP to 15.  That will give the most AGC action -- all signal 
strengths will sound about the same.  You might want to do this if you are 
listening to a round table of differing strength signals.  I keep my SLP = 0, 
to allow me to distinguish between strong and weak signal in a contest 
situation.
Next, choose a noisy band or the band that you want to set the AGC THR.  It 
very well could be different on different noisy bands.
Now, while listening to the noise, decrease the THR until you hear a decrease 
in noise.  You could also use the AFV and dBV measurements but that is a bit 
trickier.
If it were me, I'd set the THR a little higher than where it starts to be 
activated by the noise.  Actually, I like to run THR pretty high because I like 
to operate the receiver in a linear region to distinguish different strength 
signals.  Sometimes, though, I run the THR down a bit when there are a bunch of 
weak signals, like EUs calling, in addition to a bunch of strong US stations.  
Then having the AGC clip the stronger signals lets me run the AF or RF gain up 
to be able to hear the weaker EUs without blasting my ears with the stronger 
stations.

The bottom line is that there is tremendous flexibility in setting up the AGC 
and one size doesn't fit all.
Cheers and 73,
Fred
KE7X

Author of:
"The Elecraft K3: Design, Configuration and Operation 2nd ed"
"The Elecraft KX3 - Going for the summit"
"The Elecraft KPA500 and KAT500 - the K-Line Dream Station"
Printed, coil bound copies of these are all available at www.elecraft.com
KPA500 and KAT500 Quick Set Up Guide
http://www.ke7x.com/home/k-line-introduction-and-set-up-guide
KAT500 and KXPA500 Tuner Operation
http://www.ke7x.com/home/kat500-and-kxpa100-tuners
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