The handle has a taper fit in the head, which means that the tighter the screw at the bottom the harder it is to twist the handle. Assemble the mallet with the screw just loose enough so that the handle can be rotated by holding the head between your feet and firmly twisting. If you use the 'standard' grip, have the longer axis of the handle across the line of aim. The handle will fit more comfortably in your top hand, but you may find that the head points about 15° to the left or the right. Twist the head until you think that it is pointing correctly.
To set the handle, stalk an imaginary ball along a boundary line and set the mallet down without looking; see if the head is in line with the boundary. Adjust if necessary and tighten the screw a bit. Next try aiming at the peg. Hold the mallet as you intend always to do when playing and then shoot from about ten yards. Make no attempt to move your hands or your aim to make the shots hit the target. Just note where the balls go if you are missing. If they are consistently to one side, then adjust the head of the mallet (not your grip) until you hit the target or miss equally on either side. Make a mark on the nylon so that you can see by how much you alter the setting. Loosen the screw and twist the handle clockwise if you are missing to the right and anticlockwise if you are missing to the left. When you are certain the position is right, tighten up the screw in the bottom a bit more, but not hard tight.
When you play, count all misses to see that left and right are in balance. Only if you are consistently off to one side should you change. When you are finally satisfied, tighten the screw just enough to stop the handle twisting at all. Make (fine) indelible ink marks on both sides of the handle where it meets the sight line, so you can check should you have to take the handle out for airline travel.
Using the 'standard' grip the height at which you hold the handle with your top hand affects the way it points. Try it and see how moving your top hand up or down the handle changes the direction of the head. If, like me, you don't hold the handle at the top, put a piece of tape or a mark on the handle at the normal height of your top hand. See over for more advice ***.
If you want to use the mallet with the long axis of the handle in line with the direction of aim, then of course do so. With the long axis of the handle turned across the line of aim I find that there is virtually no need to check for correct alignment of the handle.
Users of the Solomon grip will usually need to have the long axis of the handle at exactly 90° or 0° to the direction of aim. Irish grip users can try the handle twisted to about 45° NE to SW, I think I would find this more comfortable if I used the Irish grip.