frameref: frameref is set to 1 by default, but this should not be taken to imply that it is reasonable to set it to 1. Merely raising frameref to 2 gains around 0.15dB PSNR with a 5-10% speed penalty; this seems like a good tradeoff. frameref=3 gains around 0.25dB PSNR over frameref=1, which should be a visible difference. frameref=3 is around 15% slower than frameref=1. Unfortunately, diminishing returns set in rapidly. frameref=6 can be expected to gain only 0.05-0.1 dB over frameref=3 at an additional 15% speed penalty. Above frameref=6, the quality gains are usually very small (although you should keep in mind throughout this whole discussion that it can vary quite a lot depending on your source). In a fairly typical case, frameref=12 will improve global PSNR by a tiny 0.02dB over frameref=6, at a speed cost of 15%-20%. At such high frameref values, the only really good thing that can be said is that increasing it even further will almost certainly never harm PSNR, but the additional quality benefits are barely even measurable, let alone perceptible.
