If you just got it dont even worry about following the instructions recommendation just yet (water level near the bottom of the collection cup for dry and near the top for wet. In fact even after broken in trying to wet skim per suggested is risky business). You wont be able to get it just right until its broken in (either the water will rise and overflow or drop too low). Just set it so the water line is noticeably below the taper. Once its working it will still foam some with the water level well below the suggested levels then you'll know its ready to fine tune more. as you've probably noticed breathing on the adjustment dial causes a change in water level. trying to get it to foam before its going to foam or trying to get more than their is to get out of it initially will only cause you to come home to a wet floor. run a short air line from the air silencer intake (going up about an inch or so) and make sure the air intake doesn't get salt clogged (another main reason for overflowing). Also water evaporation does not cause it to overflow but adding more top off water than you initially started with could (if you dont readjust). thats because you effectively lowered the pump father below the water line than it was initially set at (always a no no) never top it off your tank " a little extra", keep the max water line consistant but a little lower is fine.
If you look at the skimmer body you'll note the inner chamber (where the plastic jets force water from the needle wheel pump) and then the outer chamber. when its really broken in good there will be hardly any bubbles making its way into the outer chamber (will be just clear water with a few micro bubbles) and all the bubbles and action will be in the inner chamber and top of the skimmer. IF you dont have a clear view to the inner chamber because there are a zillion bubbles in the outer chamber it aint broken in yet (though you may still get skimate) and is also why you have a zillion micro bubbles making it into the tank.
broken in (see all the bubbles in the inside chamber and none outside it)
not broken in (see all the bubbles in the outer chamber so you cant even see the inner chamber. this is the cause of your micro bubbles as well). if it still looks like this dont even bother trying to get it "just right"
bottom line: it will be several weeks before you get a feel for it.