With so many different distortion processors out there offering many different types of effect it's not surprising that some beginners get confused over the jargon used. Here we'll focus on producing saturation, just one of the many flavors of distortion used in modern production. We'll be using Reason's Scream 4 processor for the task.
Saturation is the effect produced when tape or valves are overdriven. The result is a 'soft clipping' and induces not only a perceived volume increase but a gentle, fuzzy overdrive that is often described as 'fat' or 'warm'.
Step 1 - Loading up the Scream 4
Once you have identified the sound you want to process (in this case a nice acoustic drum loop from Dr. OctoRex), you will need to insert the Scream 4 distortion processor. The process is the same as inserting any other effects unit and you'll find the Scream neatly tucked between the RV7000 reverb and the BV512 Vocoder in the drop down menu.

Loading up the Scream 4
If you insert the Scream directly below the device you want to process, Reason should route everything automagically for you. You can see this auto-routing in process below.
The drum loop we will process as we go:
Step 2 - Choosing the Distortion Mode
Now play your loop back but be careful here as even the Scream's default mode adds a massive amount of volume to the signal. Many of the mode's that Scream offers are really extreme but we are only interested in the modes capable of producing saturation effects.
The two modes you'll want to use are 'Tape' and 'Tube'. These are selected using the mode knob or more directly using the actual LEDs next to each mode name. With tape mode selected you should start to hear some pleasant saturation applied to your sound.
At this point I have turned off the EQ and Body sections of the Scream 4. I find this lets you hear the distortion circuit without any interference. These effects can always be turned back on at a later date if needed.
The Damage knob directly controls the amount of drive the unit produces and consequently the amount of the effect you hear. Turn this up in tape mode and you should hear the saturation effect increase.

The Scream 4 modes section has plenty of options
Step 3 - Fine Tuning the Settings
To really get the most out of the effects in Scream you have to delve deeper into the settings. There are only two of these per mode, so no huge learning curve to worry about here.
In tape mode for example we have 'Speed' and 'Compression' options. The Speed function will ultimately alter the brightness of the sound while the Compression feature adds a very authentic tape compression to the sound, this is perfect for drums and you can hear it in action below.
The Scream 4 tape sat is applied to the drum loop:
...And with an alternative Tube setting:
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