Luke,
I'm not a suspension expert, but from what I've read, you need to start by doing two things.
First, you have to find out if the spring on your shock is the correct one for your weight. If it's not, then you'll never get you shock dialed in.
Second, you need to set a baseline (sag) on your shock and forks.
Check these out...
Basic rules for suspension tuning
http://factorypro.com/tech/Suspension_Setting.html
Club Racers' Guide - Baseline suspension adjustment tips.
http://www.geocities.com/MotorCity/Garage/.../ClubGuide.html
Sport Rider Suspension Guide
http://sportrider.com/tech/suspension/
Hope this helps.
RootsMan
http://CVibes.net/