Audacity - Usage notes, 16 or 32-bit, dithering

Regarding Audacity -> Edit -> Preferences -> Quality

Dither is used when going from one bit format to another.
If only recording, cutting and pasting try to stay at the same bit format.
Effects are applied much smoother when at higher bit format (32-bit) and dithering is on.

Doing processing and effects like normalization - Sampling format: 32-bit High Quality conversion, Dither: Form

Recording from 16-bit format source - Sampling format: 16-bit High Quality conversion, Dither: None

Simple editing - cutting and pasting, also recording - Sampling format: 16-bit High Quality conversion, Dither: None

"Dither noise is incorrectly applied by default if exporting to most formats where the bit depth is the same as (or higher than) the project. For example, this occurs if exporting to 16-bit WAV, 16-bit FLAC or MP3 from a 16-bit project. OGG is unaffected. Workarounds: Set "High Quality" dither to "None" in the Quality Preferences. To fix any files that have already been affected, see http://forum.audacityteam.org/viewtopic.php?f=28&t=38756 "
(From: http://wiki.audacityteam.org/wiki/Release_Notes_2.0.2 )