1. You can either leave the leveling donut off or on during pounding.
In the vast majority of installations, the top of your anchor will not mushroom enough to cause conflict when putting the donut back over the anchor. The only potential problem is really hard or dry ground where repeated blows with the pounder are required.
2. Begin to use your level only after your anchor has been pounded about 18 inches into the ground.
Initially you can use other level reference points (house, another fence etc.) to eyeball level from. Step back 3 or 4 feet from your anchor in both directions to do this.
3. Use the handles of your pounder to either push or pull your anchor into alignment.
4. Slightly over compensate when pushing or pulling your anchor back into alignment.
Your anchor will have a tendency to want to revert or spring back to where it was being adjusted from, especially as it penetrates deeper into the ground. Pounding from the same side you want the anchor to travel towards is also recommended.
5. Try not to adjust your anchor into alignment for the last 6-12in. of penetration.
Adjustment at this stage requires the entire anchor shaft to be overly corrected which can enlarge the side of the hole you have just created during penetration. You want the ground to be as tight as possible around your anchor. Remember your anchor can be corrected to level using your leveling donut.
Two people working together in rhythm can really speed things up and lighten the overall burden. Grab a buddy and get into it.