Hi,
The X/D switch switches between different input mode for Windows - Xinput and Directinput.
I think it is generally recommended to set it to the "X" position, since that is the newer standard.
My recommendation would be to try that, and if it for some reason doesn't work as expected - try the other mode.
Keep an eye on the little circles as you go through the Calibrate Controller procedure in Freerider. You should be able to move some of the little circles smoothly up and down using the analog sticks.
There is more general information in the user manual.