Nell, I don't think there is a "correct" setting. I have PS Elements instead of PS, but the threshold filter works the same (I think).
When you pull up the threshold filter, one of the options is to click the "preview" box. Think of the threshold filter as a conversion to black and white: the setting is such that any pixel with a value (in this case "lightness") greater than the threshold setting is converted to white. Any pixel with a lightness value smaller than the setting is converted to black.
On the bottom of the filter histogram is a slider. The further left you move it, the greater proportion of white-to-black in your image; the further right, vice versa. You can use the slider to get a black/white image that pleases you. It essentially makes a notan
Frankly, I use the posterize filter more: convert a copy
of your image to grayscale and then posterize to, say a setting of 6. This gives you a six-value represntation of your image. I most often use 4 as the setting on the posterize filter, again for composition.
Hope this was useful and responsive.