Re: fender strat setup
Everyone does have to start somewhere, but a 950$ american strat is not really the guitar I'd pick to learn, the hard way, on. Buy Dan Erlewine's book "How to Make Your Electric Guitar Play Great" .It has a great description of factory and player setups for any guitar. It also comes with punch-out radius guides for setting string radius. Then get a "String Action Guage" ruler from Stewmac and you will be set. Those are 2 of the best guitar related investments I have ever made.
I have probably set up about 100 student guitars since I began my high School's Guitar Club about 6 years ago. The radius guides and the mini ruler are invaluable. If I had only gotten paid for all that work!!!
+1000. I have that book. It's an excellent book to help you learn how to do setups.
One thing I just found out that could drastically affect sustain is the condition fo the frets as well. If the frets are flat or buzzing, the notes won't ring as true as if the frets crowned properly. This is why you need to take the guitar to a professional every so often.
The pickups could also contribute to the lack of sustain. Traditional single coil pickups have alot of string pull. I put the EMG David Gilmour set in my Malmsteen xtrat and it sustains for days now- more than my Les Paul. Their tone is an acquired taste though, a bit compressed.
If you have an American strat, is the neck flush in the neck pocket? Fender's micro tilt adjustment kills sustain and it really isn't needed. Try loosening the neck bolts, loosen that micro tilt all the way so that the bolt doesn't protrude, then tighten the neck back into the pocket. Here's a good guide
http://www.fretnotguitarrepair.com/El_Guitar_Neck_Angle.htm.
If you've done some minor woodworking and have a steady hand and a drill, you can install these machine bolts and replace the wood screws that hold the neck in. I installed them on my Malmsteen strat, and there is an immediate improvement in tone and sustain since they provide a much tighter fit or hold than wood screws.
http://www.onyxforgeguitars.com/Insert kit.html
Seriously, I'd take the guitar to a good tech the first time. After the guitar is initially set up good by a pro it's easy to make your own adjustments and future setups as needed, especially with Dan Erlewine's book. Usually all it will need is a quarter turn of the truss rod either way twice a year.