the higher the level of encoding, the greater the compression (though sometimes by VERY small amounts). Conversely, the higher the level of encoding, the longer it takes to encode (though decoding times are FAR less effected).
I encode all of the shows I seed @ the highest level, since the extra compression time on my pc will be more than offset by the shortened downloading times of others and the potential hard disk storage savings.
Finally, since flac compression is lossless, none of the encoding settings will have ANY effect on the sound of the show.