Yes, I'm in 1/10 microstepping. I'm running Gecko drives which are fixed at this setting, so I didn't get a choice.
Assuming all the ballscrews are metic, I don't see much point in setting the software to run in inches. If it's Mach3, I'd suppose you'd want to do the set-up in metric, but then drive the user interface in inches, if that's what you like (I run all metric even though all my other machines are in inches).
I'm guessing daus300b is using his G540 to drive the spindle through a VFD - perhaps he'd like to give some more detials of his conversion, so we can advise or admire further.