Firstly, welcome to the RadioReference forums!
Your Whistler 1040 is identical to my RadioShack PRO-651. I, along with many on this forum, prefer the use of software to program these scanners. I've used PSREdit500 and WIN500 for mine. The difference between manually programming and computer programming, is the difference between making your dinner from scratch and popping a frozen dinner in the microwave. Software, together with a RR.com membership, allows you to program your 1040 correctly without worrying about the various settings.
As for attenuation, you should not use this feature unless you absolutely need to do so. For analog frequencies, attenuation may be needed if your scanner is suffering from overloading due to strong signals. But that generally will only happen if you're using an outside antenna or some type of signal amplification. For P25, attenuation may be necessary when listening to some Simulcast systems. In that case, reducing the incoming signal from multiple towers to just the strongest signal from the nearest tower allows the scanner to decode better.