Definitely use 1.17RC2. The sample volume issues seem to be fixed in this version, and VST instruments work (mostly -- you can't pan them unless the instrument itself has a pan function.) The only reason to use 1.16 is that there are some display issues in 1.17 in Win 98 systems. If you don't care about drawing envelopes, this probably won't be a huge problem, though, even in Win 98.
If you can find the Modplug Tracker QuickStart kit (which you said you did), I think it comes with some documentation or a tutorial and 1.16. Most of that documentation applies to 1.17 too.
The wiki is not really complete, and some functions are not fully explained. Modplug is a wonderful tracker, though, particularly if you like using samples over VST instruments. Sometimes I will make my own samples by loading up a VSTi, adding effects and then exporting, editing in Audacity, and importing it back into Modplug.
The only downside to Modplug, and a lot of the free stuff out there, is that it takes a fair amount of experimentation to learn. The folks on this forum are very helpful, though.