I did miss your question, joden - sorry.
The options in the Insert Soft Synth dialog box are there to do some of the work for you, and which ones you use are entirely up to you.
As Scook posted above, to auto-generate midi/audio tracks per the scenarios he describes would work, and there is nothing wrong with setting them that way.
My own personal preference is to simply leave all boxes un-checked, except for the one to open the synth properties page, because for me and my brain, inserting a single midi and one or two audio tracks for a synth that I am only using 1 set of outputs for is super fast, and I would NEVER myself choose to use the ALL outputs choices, because I would invariably end up with a whole bunch of extra tracks I would have to go back and delete.
Also, the synth I MOST often load multiple instruments with multiple midi channels and multiple outputs is NOT properly handled anyways by any of the options - for how I use tracks. I am referring to Kontakt 5, which is usually the synth I use that supports multiple instruments and multiple outputs. (Battery 3 is my other one, but I already have a bunch of custom kits and customized routing assignments for that set up as project templates).
So, for Kontakt 5, if I have loaded up multiple instruments for a given instance of it, then NONE of the check boxes would have it generate multiple midi tracks (I would want a separate midi track generated for each loaded instrument, and the check box choices do not support that), and NONE of the check box options would generate the precise number of audio tracks I would need, as I personally choose to limit the number of loaded instruments into a single instance of Kontakt 5 to either 5 or 6, because of some quirks in Kontakt's audio Output Section and how it displays tracks for Input assignment for audio tracks in Sonar.
So, since I limit myself to 10-12 outputs, there is no check box combination that would auto-generate that precise number of audio tracks, and I would end up with manual work anyways, either adding or deleting tracks.
And, lastly, I don't feel like checking and removing checks each time I am inserting a synth (depending on the synth containing multiple instruments or not), I just prefer to do the track insertions manually. I also, in ANY case, have to go manually rename each track, set panning, and for midi set channels for synths with multiple loaded instruments going to multiple midi channels, so I just do the whole thing manually, and I rarely, if ever, miss doing something, where I might if a lot of that was auto-generated.
Again, this is all my own preferences, and the reasons behind them. Other folks use or do not use particular checked boxes for their approach. My approach works for me, and is always the same - set up needed midi and audio tracks manually, to exactly match what is needed for each instance of an inserted soft synth.
I hope any of that helps, it is really just personal choice - the above are the choices I made, and the rationale behind them.
Bob Bone