My personal preferences are: Quality High, check Fix Poke-through (set to 0.15) and in the case of long sleeves like the Morphing Fantasy Dress and pants or boots that go past the knee, check Turn Off Spherical Fall-Off Zones. Under Options  I check Use Advanced Options, this lets me tell XD to create both .obj and .cr2 files, check Copy Materials and check Save Influences. That last option makes it quicker to convert the item again for another character. But be careful with that as it can build up a lot of files in your Influences folder, which take up too much space. You can delete them if you're not going to use them again or if you're running out of room.