x264: Grainy films - Higher CRF or NR parameter??

It's up to you. Do you want to retain that grain or not? We can't tell you what you should prefer esthetically.

I dislike grain too, both for the look and the bitrate waste on essentially noise. Over the years I have tried many different solutions, but by far the best is the MDegrain3 avisynth filter. It preserves fine detail, while significantly reducing noise, from grain or other sources, thereby improving both compressibility and--to my eye at least--actually improving the perceived quality of the output over the source material. The only downside to MDegrain (unless you love film grain) is that it is quite CPU intensive, but with every passing year that becomes less of an issue.

I usually find MDegrain3 a bit too strong/smooth so I prefer MDegrain2, MDegrain3 does remove almost all the grain though.

The --nr parameter is not particularly sophisticated, but it will make grain more compressible by effectively temporally smoothing it in predicted blocks. It's a very fast, and motion-compensated, alternative to running a more sophisticated de-noising filter as pre-processing. Raising the CRF will settle for less quality over the movie overall. It's not the recommended way to deal with grain taking up too many bits. The best way quality-wise would be to use a high quality denoising filter prior to compression. Using --nr is a relatively quick and easy alternative to this which in some cases can suffice. Use values of say 50 to 200 for a decent improvement in terms of bitrate without much perceptual loss in appearance. Other crazy hackish ideas may include: turning off trellis (--trellis 0) and possibly also raising the --deadzone-inter slightly, remembering that 32 is the maximum. Turning off trellis and raising deadzones effectively reverse some of the optimisations for sharpness and detail retention which will result in less grain preserved (and less bits spent trying to do so).

--tune grain seems to do the opposite, i.e. reduce --deadzone-inter and --deadzone-intra while not touching trellis.

Yes, but as I understand --tune grain aims at grain retention rather than grain removal...

Good point.

Just use something like MCTemporalDenoise: it's superior! Yes, you didn't want to to add CPU cycles to the process, but do it anyway! At the very least, increasing CRF (= lowering overall quality) to make things so smudged that you won't see the grain any more, that feels like a very bad idea.

OK guys, thanks again for all your input and thoughts.

"--tune film" preserves grain?