Congrats on your purchase, and welcome! As for gas mileage, if you're getting 17.5MPG, you're doing good. I have an '07 Tahoe LTZ (it's 4WD as well) and my average was at about 13.4MPG. I've recently started using only 100% Gas (0% Ethanol) and I've noticed a BIG difference in fuel economy. While using 100% gas, I was able to get my average up to 17.5MPG (according to DIC) with economy driving. While driving the truck hard, (hard acceleration, etc) I still manage to keep my average at about 15MPG (according to DIC).
As far as your auto-ride goes, the only way to tell if it's working is to attach a trailer to your trailer hitch (or really, just weigh the back of the vehicle down), watch the vehicle drop slightly, then wait and see if you hear a compressor kick on, and see if the vehicle levels back out. I unfortunately don't have this on my LTZ, but my family has it on our '05 LT.
Sometimes, the compressor will turn on when the vehicle starts as well.