The throttle blade opening is adjusted with the screw you have pictured. Essentially the IAC is a calibrated leak from one side of the throttle blade to the other. The lions share of the air should be metered by the throttle blade and the IAC will fine tune the air flow based on engine load, temp etc. It appears you have an aftermarket throttle body which will meter more air at a smaller opening therefore the adjustment screw won't have to be too far in to get the air flow you need. Adjust the throttle blade closed until you start to see IAC counts then adjust the TPS.
Neal