It's equivialent to whatever "auto" changes to on the JVCs if "B.E.S.T" is turned off.

There is not really a best setting as such, it's up to preference - use edit/distinct if you want the least processing, normal/auto if you want a bit more noise reduction though it can over-smoothen things in some cases. Though I've found the TBC/DNR equipped JVC/Philips vcrs to cause ghosting between frames on the luma channels even when the TBC/DNR function is off and can also cause clipping in some cases so there is some tradeoff with these.