Hi Mike,
Does the camera need to be a certain distance from the clip?
Is the camera location on top of the monitor important? (should it be in front of the clip or my face?)
Normally with the webcam on top of the PC screen it's ok. Place the webcam in front of our face.
should I measure my clip and input it into the software (I used the default dimensions to build it)?
Yes, It's important to measure as accurate as possible the clip dimension, (fill in as "Model dimensions"), as well as the dimensions of the position in relation of your head, (fill in as "Model position"). Reference point "R" is the middle LED of the three-point-clip.
what kind of setting for curves and such would be good to start off from?
This depends on the gameoutput and your own preference. It seems to me, that the Freetrack version 2.2 is more sensible then before, so tune down the default profile game adjustments sensitivity can be helpful for beginners.
I think your problem is the "Model position" setup.