Adding a sub to a 2 channel set-up

Use the "Speaker Level Inputs" on the back of the Velodyne to augment your Focals. Then tell your 990 that you have 'Large' Front speakers AND NO SUBs. This way the 990 will send all LFE to the front amp/speakers where the Velodyne's Crossover will do the work (as opposed to the 990's crossover). Also two subs, true stereo sub-woofing (as opposed to dual mono) way is the way to go!
I am using this method with my 990 and mono-blocks to drive Magneplanar speakers augmented by 2 Velodyne DD-10 Subs. In my system this actually sounds much better than using the LFE output of the 990. It appears that the sound is better integrated since the signal for both the sub and the front speakers are from the same source with superior time/phase/timbre characteristics (in my case the Pass Mono-blocks, in your case the Sim I3). Also stereo subs give a much deeper soundstage. I know your are not supposed to be able to hear directional cues from low frequencies but try stereo subs and you will never go back! I also run the Maggies 'Full Range' by taking a parallel feed from each channel of the amps output, one directly to the speaker and other directly to the sub (like bi-wiring). You may want to experiment to find out whether the Velodyne's crossover is transparent (or flexible) enough for you (it's certainly better than the Outlaw).
This may fly against the face of conventional "Audiophile Wisdom" where many claim that the line level output of a preamp is a superior source for a Sub. NOT so in my experience. SO don't afraid to experiment with the Speaker Level Input of the Velodyne since these are very clean (as opposed to a mass market cheap subwoofer's Speaker Level Input). Also in my case the Direct Mode 7.1 output of the 990 (which bypasses the lossy circuitry of the 990) sounds much better when I want to listen to my music. I have the Special Edition stereo output of my NuForce Modified OPPO BDP-83 Special Edition Universal player going into the Front Left & Right of the 7.1 Direct Inputs of the 990 so the Outlaw only acts as a switch and nothing more.  Hope this helps.

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Ronrags, Your Velodyne Owner's manual will have a diagram illustrating the proper use of the 'Speaker Level Inputs' (amp to sub, and then from sub to speaker). Just remember to tell your 990 that you have 'Large' front speakers and NO sub.  Also use the exact brand & model of speaker wire going from the amp to the sub and from the sub to the speaker and observe polarity to keep it consistent. I would also make sure that the voice coil of the subs are in the exact plane as the voice coils of your Focals (by placing them right next to) to start with proper phase/time relationship.
I run my Maggies 'full range' by running TWO sets of wires parallel from amp (one set directly to sub, other set directly to Maggie) because the Maggies go fairly deep with a naturally occurring bottom slope which is typical for planar dipoles. My subs are dialed in to match and augment the downward slope of the Maggies. Running the Maggies full range eliminated the extra set of wires as well as the low bass crossover circuitry which I could hear as a loss of clarity & resolution. However in your case you may NOT want to run your Focals full range since they might benefit from additional headroom relief provided by only the subs doing the deep bass duty. It all depends on your criteria for the sound. Running the front speakers full range gives cleaner sound and tuneful fast bass at the expense of ultimate loudness since at louder levels the LFE info will undoubtedly overwhelm the woofers in your Focals. SO if you want to shake the house during the mothership explosion and that is more important, go the conventional route as illustrated in your sub's owners' manual speaker level input illustration. I experimented and came to the conclusion that I didn't need the extra dynamic range that I gained from crossing over the Maggies. So EXPERIMENT!
Peter, Is your listening bias primarily 2-channel?? My discussion above favors ultimate 2-channel performance at the possible expense of dynamic range limitation when enjoying the home theater experience (depending on the configuration chosen). Your system is very hi-rez indeed! So if you stick to the recommendation of your manufacturer you should be fine (which should be to take the sub output of the SP-31 into the sub). Again experiment per discussion above to hear. Enjoy.

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Ronrags, Make sure your 990 has the latest firmware from the Outlaw web site. The 990 had some LFE/Bass bugs which were fixed with the final version. It is imperative you have the latest firmware!  (Also refer to the correct Bass matrix diagram that is posted on their website.)

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