Observation based on Austria:
Well if I create a map with DEM layer with resolution=0=24,1=23,2=22,3=21,4=20,5=19,6=18 and set dem-dists=6624 the resulting quality will be pretty low.
If I create that map instead with resolution=0=23,1=22,2:21.... and dem-dists=3312 - the filesize will be similar or actually smaller, the level of detail/quality of the DEM however much higher. Compared to the much bigger (in MB/filesize) option of
0=24,1=23,2=22... and dem-dists=3312 there is virtually no visual difference in Basecamp.
Even with dem-dists=1656 there is no visual difference if you create the DEM layer starting with resolution 0=24 or 0=23. For dem-dists=3312 there is really no reason to go higher than resolution 23. Even resolution 22 would be fine. For dem-dists=1656 resolution 0=23 is good enough.
So actually if mkgmap could somehow make use of this to optimize the quality/size ratio of DEM layer that would be pretty good.
Even though dem-dists=1652 looks pretty neat in Basecamp - I'm not sure if it is not sometimes creating detail that is not there. For sure if you create a route and look at the altitude profile the overall climb/descent will be overstated - but that's of course also due to ways usually following more the possibility of lowest climb/descent vs shortest distance. In general the resolution of both OSM and DEM I guess is then not good enough and climb/descent will be overestimated a bit.
For Viewfinderpanormas 1" DEM files - the DEM produced with resolution 0=23 and dem-dists=3312 seems to be a good compromise if size is not a big factor. If size is a factor resolution 0=22 and dem-dists=3312 will be the optimum. For best visual quality resolution 0=23 and dem-dists=1656 will be best (though I'm not sure if we go for fake accuracy here. Resolution 0=24 and dem-dists=1562 is really not worth it. It maybe however that the 1"DEM is not up to actually improving quality for dem-dists=1656 in the Alps so best quality default would actually be resolution 0=23 dem-dists=3312 and best quality/size 0=22 and dem-dists=3312.