It's worse than I thought. Last night I tried again and this time didn't readjust my polar alignment so my Dec was off by about 2.8 pixels per 2min exposure - more than the 2.5 pixel max settling setting. I thought that if I turned dither OFF by unchecking the box that I wouldn't have settling problems. However, SGP still tried to settle before starting each frame.
Am I correct that SGP will try to settle the autoguider when using PHD2 regardless of whether dithering is on or off? That's what it was doing with my setup. Which seems odd since what is it settling from if there is no dither?
Anyway, this restricted me to taking 1 light frame at a time as I had to pause SGP, stop and restart PHD2, then unpause and take the next frame. This was an extreme example of poor polar alignment but I was just trying things out for my California trip - normally I would have a better PA. Still it means that settling seems to occur regardless of whether dithering is turned on or off. Is there any way to turn off settling?