160,000 BTU's is plenty of heat. I use a 65,000 BTU burner and have no problem getting 7.5 gallons up to a boil.
You don't say how much water you put in the pot to test it, but basically most of the pot is going to be the temperature of the water in it due to the large thermal mass of the water. The pot will basically be warm on the very bottom, but it is passing the heat into the water. As the water heats up so will the pot.
There should be some sort of small metal air intake adjustment near where the propane hose goes into the burner. It probably looks like a metal disc with some holes in it. Just turn this until you get the bluest flame. This adjusts the propane/air mixture for the hottest flame.
It is normal to smell a little propane when you turn the unit off or when you disconnect the hose. This is just the small amount of unburnt propane left in the hose after you turn the unit off. Make sure you shut the propane off on the input line to the burner, and at the tank.
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