What position should I be driving in.
Normal street driving should be 2HI. With the twin sticks this would be rear hi. The stock shifter is labled 2HI, 2LOW, 4HI and 4LO. The 2 is really rear drive only while the 4 refers to both front and rear drive. See the pics below for the stock t-shift and j-shift patterns as well as the twin stick patterns. With the twin stick, the rear drive shifter is to the passengers side, and the front drive shifter is on the drivers side.
Do I use the clutch when moving the twin sticks as I do with the tranny or does this have nothing to do with the clutch.
Transmission and transfer case are completely seperate. The transfer case has straight cut gears and no syncronizers. That means no shifting while moving!
The straight cut gears and no syncros means that when you go to shift from one range to another, or, in the case of the front drive, from neutral to either HI or LO, the gears may not be lined up so they will engage. In that case, just let out on the clutch just a little, to move the gears just a little, while pushing on the transfer case shift lever. You will feel when the shifter moves, engaging the gears.
If I ever take it off road which I'd like to what position should I be in?
That all depends on what you're doing off road. For a graded dirt road, Rear HI is fine. For anything else, the best I can say is use whatever you need to. I've found that, although I can climb some reasonable hills in Rear HI or Rear LO, I get some wheel spin and that tends to rip up the rear tires. Typically I'm either in RearHI or both Front and Rear LO.
Again, all depends on what you're doing. If you're plowing, probably Front and Rear LO, but I dunno... Phoenix AZ doesn't see a lot of snow, and when I'm in it I am 4-wheeling!!!
Do I ever need to move the hubs outside on my front wheels and when?
If you have manual locking hubs, you would set them to the LOCK position if you intend to, or suspect you will have to, drive in 4 wheel drive. The hubs are what lock the wheel to the front axle. With the hubs unlocked, the wheels just spin on their own.
For driving on the street, the hubs should be unlocked.
When I'm going off-road, typically there will be a time when I (and everyone I'm with) air down the tires. That's the time I lock the hubs. Then when the day is done, and I'm getting ready to air up the tires, that's the time I unlock the hubs.