Currently, my boat has the Bravo 1 XR drives measuring 35 1/4 center to center at the front of the drives and 35 7/8 center to center at the rear of the drives. I think this would be tow in if it works like a car. My question is what type of setting the drives should have for the best performance and handling.

Call the manufacturer for your boat and see what their rigging guys say. Eliminator told me that for a 28 Daytona the want the drives at 0" or 1/8" MAX toe IN, No toe out at all.

go out and play with it...figure it out for yourself. props play a large role in this dimension as well.