16 bit
No doubt: Many million selling albums were done with 16bit recorders. Many great sounding albums were done at 16 bit.
If you have limitations that preclude you from moving to 24 bit, then be happy and record away!
24 bit
There is a great thread at prosoundweb, it's very long and quite technical, but worth reading. In it, Bob Katz, and many others, provide sound arguments for recording with peaks no greater than -6db.
Essentially what they are saying, is the math being done while processing can introduce digital distortion when summing digital signals greater then -6db.
When recording at 24 bit, you can EASILY afford this as even at -12db peaks, the noise floor is still over 100db below you. With 16 bit you cannot afford to do this.
I (and most others) have been programmed to track as hot as possible. We did this in analog for \"tone\" and noise floor considerations. We did it in 16 bit due to resolution problems. With 24bit, we need to rethink how we deal with levels. With the fidelity offered at 24 bit, there is no need to track up to -0db. In fact, as the thread points out, tracking hotter then -6db degrades the end product. Most people who have tried the -6db peak report back their recordings sound better.
Heres a link to the thread starting at page 7 (where it starts getting good), its a tough read, but worth it IMHO.
http://recforums.prosoundweb.com/index. ... 918/0/96/0
I plan on immediately using this technique and hope to make better recordings from this point on.