Watch the Funky Child: Solo online guitar lesson by Jeff McErlain from Blues-Rock Evolution
For gigs, I start with my guitar volume on 10 and set the amp to distort for a thick rhythm sound - not too distorted; comfortable enough to play some blues licks.
For semi-distorted rhythm parts, I'll clean it up by backing off my guitar volume. For leads I'll use the whole range of the volume knob, but to go over the top I'll use a boost/overdrive pedal to push the amp harder and add volume and sustain. Guitar + OD + Amp = Classic Tone.