We recommend material setting 1 (see manual). To determine moisture content, the meter measures the electrical impedance of the test material. Different settings are required to account for the difference of impedance in different materials. This meter has settings for wood, carpet, dry wall, concrete etc.
Because there is such a wide range of carpet types and pads, it is not impossible to provide moisture-to-impedance correlations for all of them. This is why we recommend setting 1 which has the widest moisture range.
So, while you will not be able to get an exact moisture percentage you will be able to determine dry, moist or wet conditions. This is also why we recommend testing a known dry area of the carpet first to establish a reference. In this way you can use this meter on carpets to determine the extent of flood damage, discover cracks in the foundation causing water seepage, or to discover pet accidents.