From what I understand Chris, if you have good seeing and/or the quality of each image frame is similar then by selecting more images you get an improved signal to noise ratio so the image looks cleaner, but the final image may not show more detail than a higher quality setting.
However if you have a avi with only a few dozen/couple of hundred good frames then selecting a higher quality will weed out the poor one and only stack the good ones. The down side of this is that you wont have as good signal to noise ratio. The better the signal to noise ration the harder you can push the waveletting, within moderation, if you want to.
That's how I understand it
(did any of that make sense
)