4-input old-school tube amp:
Normal + Brilliant channels linked, volumes usually @ 9-10
Master volume @ 9-10
Guitar volume @ 10 for lead work, backed off for cleaner stuff, or just play lighter (or both, that's the beauty of a good tube amp)
If I was playing clean only I might set the input channel volumes @ 5 and turn up the guitar volume.
If that old National is a tube amp, I'd probably do like your friend does - amp on 10, guitar volume controls the gain (it worked for Hendrix ).
If the guitar's electronics are set up right you shouldn't be losing any tone. I added a treble bleed circuit to mine so it doesn't get muddy when I roll the volume down.