I have just bought this bike last week after selling my old 750 Katana and I've just increased the rear preload on my '01 1200 to a '6' setting from the stock '4' and what a difference. Feels as if it's a lighter bike with quicker steering response. (considerably firmer too) Is this normal?
I'm 6' & 195lbs and it felt too soft.
I'm kinda new to monkeying with bikes
Yep.
Going up on the rear preload changes your chassis angle ass-up nose-down, thus changing the rake and trail, thus giving you quicker steering.
You may want to check your headlight adjustment now, it probably points a bit lower since you raised the rear.
Just minute adjustments to your suspension can make big differences in the way your bike handles. Now that you've gotten started tuning her up, you might want to check this link:
http://www.sportrider.com/tech/suspension/