Depends on the system you have, and what your personal preferences may be. Each system and monitor combination has a slightly different complement of resolution settings. You use the one that suits you. Flat panels have a default (native) setting that generally looks the best, but you can try any of the others that are available. Different settings may be necessary for special situations, such as vision problems; or the need to have as much screen space as possible (obviously these 2 would go in different directions with the same system).
So, it's personal preference, balanced by needs.