The modification is simply to go up 12" so that your feet can go over the front of the dolly and so your harness doesn't drag on the ground. The modified dolly is still perfect for towing in prone.
VG settings will vary with make and model of glider, but 1/3 is fine for towing in smooth air, and 1/2 is better for rough air. The reason is that in rough air you may need to come down to the tug quickly and the extra VG enables this. Prone harnesses have the advantage of being able to stuff the bar while supine is restricted to 80% downward pitch.
I use the pro-tow system attached to the carabiners on my harness.