The "freq" controls are for the internal x-overs. They filter unwanted frequencies, so your sub plays only low bass and full-range speakers play mid-bass and above.
It sounds like you've got everything set up pretty well as a starting point.
You might want to lower the sub's x-over frequency a bit to around 80Hz. It'll help to disguise the sub's location in the trunk.
I'd experiment with the x-over frequency with your full-range speakers to find out what suits them (and your ears) best. Just don't set their x-over frequency any higher than the sub's or you'll have a gap in your system.
