In No.1 it states that "if in forward flight" apply aft cyclic. This is to use some of your positive airspeed to "load the disc" by gently flaring and increasing rotor rpm.
If you are settling with power (No.2), you do not have any airspeed to trade, you may be going forward if you have a tailwind, but it is positive airspeed you need to recover hence forward cyclic.
I think No.1 is referring to a situation when in forward flight without enough engine rpm to maintain rotor rpm (maybe at manifold limits, too heavy, overiding govener etc.), hence low rpm horn. But not referring to settling with power.
Please feel free to pick holes in these explanations as it will only improve my knowledge as well.
SFHawk
Beat me to it Sky Bear! Good to know you can get speedy responses, I'll learn to type more quickly!
Last edited by SFHawk; 16th Oct 2011 at 11:39.
Reason: Can't type quick enough