Dither is an intentionally applied form of noise used to randomize quantization error, preventing large-scale patterns such as color banding in images. Dither is routinely used in processing of both digital audio and video data, and is often one of the last stages of mastering audio to a CD.

Should I use dither?

If you're going from 32-bit fixed point (not floating point) to 24- or 16-bit, you should dither. However, if you're bouncing your mix to a data-compression codec like MP3 or AAC, dithering is not necessary. ... Only dither when you render your audio to a lower bit-depth. Don't dither before converting to MP3 or AAC.

Does dither matter?

Apply dither any time you reduce bit depth. If you're reducing to 24 bits, the type and strength of dither almost don't matter. If you're reducing to 16 bits (or less), a low to medium dither level with some noise shaping is probably best.