I have started "backing up" Babylon 5, Season 1 from DVD-9 to DVD-5. And I thought I would give it the "test" of Sharp vs. Smooth given that the originals are Dual-layer DVD's.
These DVD's are a few years old and they require no decryption, so I went right to work using DVD Shrink.
At best I can only do a whopping 59.9% compression rate. I cant compress them any less(i.e. 65% or 70%).
I made 2 "backups" 1 using Sharp, the 2nd Smooth on DVD+RW's. For both I naturally enabled 'Perform Deep Analysis'.
CONCLUSIONS:
I noticed that with the 'Smooth', the characters skin seemed blotchy, especially when stationary or semi-stationary and just talking. Overall, the picture looked just a slight grainy(not much); Maybe just a hair below the quality of a brand new VHS movie.
The Sharp(Default) was less blotchy and more clear, and from what I could see there was no choppiness.
I even did a screen cap off of each of almost the exact moment in an Episode, and noticed a difference with the Sharp one looking better.
So to sum it all up: If you are gonna have more Drama-type stuff, slower scenes more talking than use the default Sharp. I assume this would be the case for most DVD's.
If you are doing a "project" with lots of action(frequent & somewhat quick movement), then use the Smooth setting as things will be moving fast enough you wont notice the blotchiness.