Doug, The way i read "software limits" is that you are turning off your limits ! If you mean "soft limits" then its differant somewhat, and i'll say that with the soft limits settup correctly, it is so sweet ! If you haven't stalled a driver and the mach still knows where it is you can run right up into the slow zone and it will slow and stop where you set it. then turn off soft limit and do your homing routine. after that run away from limits to outside the slow zone and turn soft limits back on ! As for homing the z axis, yes definately do so ! with a mill i set mine so zero is face of spindle to table and top of slide on switch is a positive number. I also leave g54 zero'd and use it for touching off tools, and watching my z's on dro in lue of using machine position button. If you have servo's and are crashing against hard stop then be aware that hard stalling a servo can burn it out in a heart beat, I did so and it was heart breaking. make sure that those limits are set up correctly so the switch stop the axis before any hard stops can be contacted, don't go for the last few thou of travel. simply put make sure you have a safety zone ! The limit override is a handy way of being able to drive off of the switch but be aware that it will also allow you to drive through a switch to the hard stop ! This is what burned out my servo, I hit the wrong button and went the wrong direction to the hard stop and it was too late ! when in doubt, turn off power and hand crank away from the limits. i'll add that i tried numerous distances for the slow zone setting for soft limits and i really like it with 3" as it gives me a visual that i can estimate so that when say i mess with tuning and fault out a driver but dro still thinks its traveling then it becomes a potential problem when driving up to the switches as it will either stop way short or drive right to switch ! hope this helps you out some .... most likely i said too much as usual !
Don
IH v-3 early model owner