Hi, MadameX
"Do I save it in the final frame of the simulation?"

It doesn't really matter which frame you save, the prop will be saved as it looks in frame #1. There will be no draping etc. applied.
This does not apply to exporting as a wavefront .obj, in which case you must be careful about which frame you export. However saving as a "morphed" .obj file can have its uses, tho.

A couple of additional notes regarding making meshes for dynamic clothing:

1. Try to make the polygon size fairly small and consistent, preferably close to the size of the underlying figure's mesh. This makes it easier for the cloth room the decide where to distort.
2. Try to use mostly quads (4-sided polygons). 3-sided ones (tris) can work, but often give a zig-zag effect to the folds. OTOH, depending on the pose, sometimes tris are better.
3. If you are going to use constrained/soft-decorated/hard-decorated etc. groups, give those areas a separate colour on the mesh before exporting from Hex. That makes it a lot easier to apply the group in the cloth room (just hit "Add Material" when assigning the group and select from the pop-up list...)

One more thing:
When you save as a prop, the complete geometry is copied into the pp2 file (unless you have "Use external geometry" turned on. I think that's what it's called - I never use it because I get confused...)

Hope that helps,

Cheers,
Diolma