Start mixing (with the paddle) on "1," when the flour stops flying around, mix on "2" until the ingredients are well combined, and the moisture seems to be evenly distributed. Knead (with the hook) on "2." Before the dough is completely kneaded, remove the bowl from the mixer, the dough from the bowl, and finish kneading by hand -- only until the dough passes the windowpane test. Set the dough aside, wash and dry the workbowl. Pour a little oil (usually olive, but it depends) in the bowl. Pick up the kneaded dough, "pull it down," put it in the bowl, cover it and let it proof.
Alternatively ("Autolysis" method): Mix on 1 until you can safely raise the speed to 2. Mix at two very thoroughly, about five minutes for a two loaf recipe. Let the dough sit for ten to twenty minutes, then knead it on two for about two minutes. Let the dough proof until increased in volume by about 50%. Remove the dough from the bowl, fold it in thirds along one axis, then thirds on a perpendicular axis. Let the folded dough rise until doubled in volume.
You see the particular take on autolysis (autolyse
in French) I just wrote, at the best bread forum on the internet -- the fresh loaf: The Fresh Loaf | News & Information for Amateur Bakers and Artisan Bread Enthusiasts
Just bear in mind that although it's an excellent forum, it's not gospel -- and like all enthusiast forums it tends to get swept up in fads.
Getting back to "how to use the mixer for breads:" There are only two sensitive points. One comes in the beginning when you first mix -- it's important to get the flour/water ratio right. Fortunately it's not very difficult. If the dough sticks to the bowl it's too wet; and if there's dry flour on the bottom, it's too dry. (A bit simplistic because sometimes you use ingredients that express moisture as they're incorporated or kneaded -- but generally true).
The other comes in knowing when to turn the machine off. The dough changes appearance when it's almost ready -- it looks smooth and it begins to feel silky. That's the time to take it out and finish kneading it on the board until it passes the "windowpane test." It takes some practice. You'll definitely over-knead your bread a few times. Just part of the learning curve.
FWIW, I'm mixing and kneading most of my "artisanal" (aka "bread basket") breads by hand -- not because you get better texture (you do), but because I'm still tweaking the recipes and can use the information I get from handling the dough through all the stages. On the other hand, Izbnso, who's a technically better baker than I am (by far) also hand mixes and kneads those breads by hand -- she says the improvement in the bread is worth the extra time and trouble -- and frankly she's a better judge of that than I am. Sometimes I get a little lazy.
When you get serious about baking, you'll find "by hand" invaluable for spotting the various timing cues at least until you're sure about a given type of loaf -- but after you've got them you tend to use the machine. It's a lot easier and saves a little time. At any rate, you want to get a pretty good handle on both.
I've got three recipes posted in Chef Talk that are good for advanced "beginners," and IIRC all of them have directions for stand mixers as well as by hand. They're the Pumpernickel, Onion Dill, and Olive breads. The pumpernickel and onion dill will speak to your ethnic roots -- the olive bread is more up the alley of your current tastes.
Right off the bat, it's probably a good idea to get a couple of good bread baking books. My own bread baking is sort of in the style of Peter Reinhart (extra rises, retarded rises, pre-ferments, poolishes, etc.). Even setting my own prejudices aside you can't do better than making his "The Bread Baker's Apprentice," one of your first two or three books on bread baking.