So does it really matter to set the payout higher? I normally don't see a payout until .4-.8. This coming one will be around 1.0. If I had set the rate at .25, would I have already seen a payout, or just still accumulating waiting on enough blocks found to payout?
Yes and no. The longer the queue, the longer everyone will wait. The higher your minimum payout, the longer you will wait.
wizkid performs a manual payout when the queue gets this large, so you can expect things to normalize pretty soon.