I ride mine to headshake. I want a bit of headshake, not a lot, but enough that I know the damper is not too tight. Headshake won't hurt you, and it often tells you things about your riding (usually that you are putting input into the bars without knowing it). A bit is fine. The less dampening the better. Basically the right setting for a damper is one where you don't know it is there.
In the old days of linear dampers you would see guys crank them way up, come into the pits after a race, and fall over at slow speed trying to make a sharp corner into their pits on a damper on full.