I'll respond anyway.
The answers will change though, depending on the source material - TV or Music.
1 - Discrete every single time for me. Discrete is simply far superior in every way, despite what Dolby Labs will try to claim along with SRS. Matrixing is a compromise, akin to downmixing.
Artefacts are a definite possibility, plus the decoded result is not going to be the same as the discrete mix. It's like using a stereo downmix against a dedicated stereo mix.
2 - When watching TV, DPL II and Matrixing can be good. It is very difficult to deliver discrete surround for broadcast, as it tends to be restricted to HDTV which means pay per view or heavy subscription. When I supply for Broadcast or film, I will give a DTRS tape that has the discrete mix on tracks 1-6, and the Lt/Rt matrix on 7/8. This way, the broadcaster can play out the Lt/Rt and it will decode into something that is not as good as discrete, but definitely superior to vanilla stereo.