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I understand what the dithering process does, but I'm not clear what the difference is between the different types available when you are bouncing a project for export.

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Just out of curiosity, what are the three types? –  BenV Jan 22 '11 at 3:09
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Two of the three options use noise shaping, which is basic filtering of the additional dithering noise.

If you understand the effect of dithering, you will probably be familiar with its big drawback: the introduction of noise. While the noise should be randomly generated to get the best dithering results, the most significant reason we dither is actually to prevent rounding errors when lowering our resolution, e.g. by getting back from 24 bits (or even 32 bits) to e.g. 16 bits for CD production.

Noise can be more irritating on certain frequency bands. (6 kHz is the most famous frequency band for irritating noise, as far as I know.) Noise shaping is used to get rid of this, by actually not adding white noise to the signal, but slightly filtered noise, so that the total amount of energy still masks the rounding errors, while the dithering signal is more pleasant to listen to.

Especially if you are going to downsample from 96KHz (or 88,2KHz) to 44,1KHz, it is useful to get the noise into the high frequency bands, since most of them will be filtered away during the downsampling.

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I pulled up the Logic manual to take a look at what they said about this. Below is an exact copy from the book:

Bouncing and Dithering

Logic Pro provides you with the professional POWr (Psychoacoustically Optimized Wordlength Reduction) and UV22HR dither algorithms, designed to convert 24-bit recordings to 16-bit files (as required for CD burning, for example).

POWr dithering can be applied when:

Bouncing audio files to disk

Exporting OMF files (See Exporting OMF Files.)

Exporting AAF files (See Working with AAF Files.)

You can choose between the following dithering modes:

None: No dithering is applied.
POWr #1 (Dithering): A special dithering curve is used to minimize quantization noise.
POWr #2 (Noise Shaping): Additional noise shaping is used over a wide frequency range, which can extend the dynamic range of the bounce file by 5–10 dB.
POWr #3 (Noise Shaping): Additional, optimized noise shaping is used, which can extend the dynamic range by 20 dB within the 2–4 kHz range—the range the human ear is most sensitive to.

Note: Noise Shaping minimizes the side effects caused by bit reduction. It does this by moving the quantization noise spectrum to the frequency range above 10 kHz—the range the human ear is least sensitive to. Technically, this process is known as spectral displacement.
UV22HR: Allows for the best possible sound resolution when bouncing 24-bit recordings into 16-bit files.

The dithering mode that sounds best to you is primarily dependent on the audio material, and your personal taste. Audition the audio material with each of the dithering modes to determine the right setting. In some cases, you may find that the best results are achieved by using no dithering at all.

Important: Dithering the same audio signal multiple times should be avoided.

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