The dial sets the temperature of the heated water - 3 is fine - max will probably have the water close to boiling which is not good - zero will provide no heat.
This thermostat determines the temperature of the hot water that's pumped around the system - turn it up too far and the radiators my burn your skin. A high setting will provide hotter water and a quicker heat exchange but at a cost. Your circulating pump may well have a speed adjustment to pump the water around the system quicker - you may also consider turning down the radiators in some rooms to provide more available heat to those rooms where you want it to be warmer.
Consider balancing the radiators...
http://www.miketheboilerman.com/balancing.htm
Peccavi
November 2009
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