I have it set to personalized.
I guess it depends on you.
I feel like I'm using the fitbit to encourage myself to be more active, so I hopefully am rarely having actual "sedentary" days.
So I don't want to start with a super low calorie count for the day, even though the fitbit adjusts some due to your activity. I just feel like for me I might pick out my meals too conservatively based on that, and get super hungry.
I looked over my history charts of calories burned (based on the actual activity the fitbit recorded), and while there's a huge spike on the weekend when I work out alot, the other days don't vary too much, so I think what they estimate is going to be decent.
I'm currently set to the medium level 500 calorie deficit, wish I was tough enough for the 1000 deficit like you.