I have run 170F, 180F and 192F t'stats. Each situation is unique - you need to know all the facts before you can compare one situation to another. Example - for folks with electric fans, when in traffic with ambient temps high enough to open the t'stat, it's usually the fan temp. switch that will control the operating temp, not the t'stat. You can have a 160 t'stat - but if it's 90F outside, and you're sitting still in traffic, the temp's gonna climb until your fan controller cranks the fan on. With a mechanical fan, the t'stat should control the temp. If you're installing a lower temp stat to deal with a creeping temperature problem, you're just buying time. If the radiator/fan combo won't hold the temp at the t'stat level, then you've got a heat rejection problem that ultimately needs to be dealt with - either with more radiator, or more air moved across it, or both. Lowering the t'stat temp in that situation is not a viable long term solution. Harmonkeiser - If you're putting a new engine in, with the same radiator/fan that was allowing it to run in the 200-220 range - well, I'd invest in at least a cleaning/rodding of the radiator, and a look at how my fan is working if you want to preserve your investment in that engine.
What I've found is that during times when the ambient temps fall below 50F, the 170F t'stat is just too low (the 160 would be worse). It impacted my fuel mileage when winter showed up. I moved up to 192F and the engine seems much happier. I wouldn't go any lower than a 180F t'stat. And remember, your cooling system is more efficient with the higher temp t'stat because the delta across the coil is higher. Said another way - it takes less time to remove heat from the coolant when you're using 100F air blowing across 192F coolant (92 degree difference), than when you're using 100F air blowing across 180F coolant (80 degree difference). The bigger that delta, the more heat you'll remove.
Output doesn't vary tremendously with coolant temp - but it does vary a lot with intake air temp. Get the coolest intake air you can - power and fuel economy will be improved. But let the engine operate up where it was designed to - in the 180-195 range. Your oil will thank you for it. Don't forget, a lot of condensation finds it's way into the crankcase when the car cools off at night. It helps to get oil temps up over 200F to boil that water off and get it out of the crankcase. The higher temp t'stat will help that happen more quickly.
By the way, the notion that a 160F t'stat will stay open too much allowing water to circulate in a way where it can't get cool isn't an accurate description of what's happening. The 160 will cycle just like any other t'stat will. However, the temp delta across the coil gets so low (in August at Hissin's 110F in AZ) - only 50 or 60 degree difference, that the radiator simply doesn't have the capacity to cool it that low. It's not really the fault of the t'stat - it's that the core doesn't have enough heat transfer capacity at that low temp. delta. If you look at guys with the huge aluminum radiators, they can manage keeping it at 160 no problem - cause they've got the extra radiator capacity to actually do what the t'stat is telling the system to do.
