10 POINTS! Gas water heater valve settings?

I moved into a new place and i found my tap water didn't get very warm even when i cranked it. After inspecting my water heater, I saw a dial on the TOP of the control center, it was on a blank setting with nothing written on it, I saw that it also had settings that said ON and PILOT...it made sense to turn it to on. Thinking it'd take time to heat up to see if that fixed my problem, i went to work for 8 hours and came home. It didn't fix my problem and on further inspection of my water heater i found it was set on a low vacation temperature setting. :) So i fixed my hot water problem..but want to know what i did when i turned that top valve! I tried turning it back to the blank setting but i heard the whoosh sound gas makes and switched it back to on. Is the ON setting leaking gas into my basement or something? and can i safely turn it back to the blank setting? Also, will changing it back burn out my pilot light? Help Please!