Impossible to say which settings are best for your situations, as you don’t give any information about raw formats/camera brands or computer specs.
Personally, I’ve set the first two (“use raw file instead…” and “high quality…”) to “always”, and “generate thumbnails in background” to “never”. But then, I have a reasonably powerful system… (though by no means a high end system). I do know that my embedded thumbnails are about 1000 px high (which is 1/4 of the raw size), and my screen is 1080 pix high.