So yes, maximum cooling and blue setting will give you better cooling as the circuit remains closed and you are getting air directly from the efforts of the air conditioner. Having the dial at neutral or red means an external circuit is involved and you are introducing "unprocessed" air thus if ambient temperatures are higher than your desired temps then you will not get the maximum cooling effect. Eg aircon in your home on max cooling but someone has left a door or window open.

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2009 135i M Sport Convertible
2008 X5 3.0si
2003 E46 318Ti M Sport Compact - donated to parents
2003 116i Hatchback - donated to brother
2002 316Ti - Sold
2000 318ci M Sport - Sold
1998 318i Sedan - Sold