That is strange. What version of Serato DJ are you using? As for "best" settings, this is really hard to say, and depends on a lot of factors. In theory, I would set the Output Quality to 100%, and then just adjust the dimensions of your output using the Mac OS X Display Preferences. Other than this, MixEmergency should be set up to perform well by default. You could reduce the Cache size a little, if you wanted (I think 200-300MB should be more than enough), but it's not really necessary.
