Ok, so here's my problems...
when i was first setting it up, I left off the grey control valve, and no matter where I adjusted the red control nozzle, I had water pouring into the collection cup; so I think i need the grey control valve. I had called coralife and they had told me the same thing, to get the pump as close to the surface as possible, but since i still needed the grey control valve on it I was only able to get it to about 3 inches below the surface... however, set up like that (and with a valve to control the airflow that I installed), I was able to produce some really good bubble filtration, but with TONS of microbubbles overflowing through the "bubble diffuser" into my tank.
I had the sponges in the bubble diffuser, but it just kept overflowing, the water didn't flow down through the bubble diffuser hardly at all, as far as I could tell the microbubbles were going down to the bottom sponge, not going through, and then creeping up the sides of the diffuser so as to avoid the black sponge, and then falling directly into my tank.
So I guess my next step is this: I'm going to leave the grey control valve on; along with my valve on the airline, and ditch the bubble diffuser in exchange for the other sponge. I need some help though... I have no idea what it looks like. Can you buy them by themselves? If so, what do they look like, what brand works best, etc.... (attach a picture if you can or something) For now I took the skimmer out and am using my old one that doesn't work so well anymore, but I can tell that the new skimmer is much better than my old one as soon as I can ditch the microbubbles. Thank a lot for the advice!