recommendations for settings on 2120 as ISCSI backup device?

The file system used, BTRFS, isn't well suited to be filled up to the brim (to put it bluntly, it breaks). And the file housing the iSCSI container is on the BTRFS partition. So if you max out your iSCSI usage, you fill up your file system, and God knows what will happen. Also, some backup software produce lots of small-block I/O to a large file, which is unsuitable for iSCSI on OS6 (you might get better performance over CIFS). There are some threads on the subject, but at the end of the day, you will have to test this yourself locally (and I am extremely interested in your results as I have similar usage scenarios, albeit with cheaper units).

Later edit: iSCSI containers can now not be used to fill the volume, there is a 90% limit enforced by NTGR. I'm a little unsure about how I feel about this. I have tried making a max size iSCSI container and then filling the rest up with junk files down until it can't take a 1k file, meaning completely packed, and this has worked fine... at least for now. Small-block I/O speed problems can be solved in the latest beta by disabling sync writes for the iSCSI LUN.