Am I supposed to delete the entries in the S3 under Miner Configuration and add 192.168.1.253:3333 for Pool 1
I'm a bit confused as to what you are trying to do. I think you are combining / confusing two separate features found in MultiMiner.
The first is support for monitoring and managing Network Devices. This has nothing to do with the Stratum Proxy feature. This feature means that, if you take the proper steps to enable the RPC API on your Network Device controller, MultiMiner will automatically display the ASIC under the Network section in the main window.
The Stratum Proxy feature allows you to point any other miner, be it a desktop miner or Network Device, at the IP address of MultiMiner and the port specified in the Stratum Proxy settings. BFGMiner will proxy the work from the miner to the pool configured within MultiMiner. Note that you must click the Start button to start the Stratum Proxy (and other miners). This will require you to adjust firewall settings on the PC MultiMiner is running on.
Which is it you are trying to do and having trouble with?
I scanned hardware and clicked start and closed the program and reopened it.