I play through a Mesa 20/20 power amp into a Mesa 2 x 12 cab in stereo mode.  The low-wattage tube set up sounds delicious at the low volumes I need for the venues I play.  I also run direct to the PA for recording and volume support, depending on the venue. 

I had the 20/20 sitting around unused for years until I got the X3L. I re-tubed it with JJ's, and did the so-called 'deep mod'. W.O.W. wow. The Spiritguitar dual patches are heavenly in this set up.

Here is a crappy phone pic of the rig dressed up with Halloween lights for a gig tonight:

[IMG]http://i171.photobucket.com/albums/u302/tbrisson/IMG_0317.jpg[/IMG]

Phil, I play traditional blues and rely on the guitar's volume knob extensively throughout my sets.  I mainly use the Fender-type amp models, the JTM-45, and the Matchless DC-30 (my current fave).  To make sure I get the full range of the volume knob, I minimize any use of effects and especially avoid heavy compression.

Note that many of the models mimic the real-life behavior, i.e., my real Boogie rectifier doesn't react well to subtle volume knob tweaks when in high-gain mode, either.

Try checking to see what effects are on and how they might be interacting with your signal.

Regarding the PA, it is indeed tough to get a dynamic mix.  I have found you definitely need a PA with plenty of headroom, or else you get the result you mention where everything is compressed during the louder parts of a song, and then all of a sudden the guitar is too loud when everyone is quiet.  I'm looking to try different amps soon for the same reason.

I have been using a Peavey CS200 into my Marshall 4X10.  The flat response of the PA amp lets the POD be the direct tone generator and I don't have the extra layer of EQ to fight.

I have run my POD XT into the effects return on my JCM 900 combo and it sounded pretty awesome. I have used it with a generic 412 loaded with 80's Eminence speakers powered with a Carvin stereo tube power amps and it was OK. Coulda been the speaker cab.