I believe the PG is the farthest outside defender, and the center is the inside defender. Crucial to have good rebounding and ID on your center if you want to run 1-3-1.
Generally it seems riskier to use a 1-3-1 over a 3-2, as you sacrifice a lot of ID and RB, perhaps more than the gain in OD (relative to 3-2). But if your opponent runs a one dimensional outside attack, it might work.