Oh cool, a reply from the Dev himself - thanks man!
Anyhow, I was sure to read the scrypt-readme in addition to the main readme before posting - the only intensity related notes I saw there were:
scale goes from 0 to 20 to mimic the "Aggression" used in mtrlt's reaper. The
reason this is crucial is that too high an intensity can actually be
disastrous with scrypt because it CAN run out of ram. High intensities
start writing over the same ram and it is highly dependent on the GPU, but they
can start actually DECREASING your hashrate, or even worse, start producing
garbage with HW errors skyrocketing. Note that if you do NOT specify an
intensity, cgminer uses dynamic mode which is designed to minimise the harm
to a running desktop and performance WILL be poor. The lower limit to intensity
with scrypt is usually 8 and cgminer will prevent it going too low.
SUMMARY: Setting this for reasonable hashrates is mandatory.
Which does not seem to relate to the passage I posted originally in that it speaks of a minimum of 8 and that going over what the GPU can handle leading to HW errors or a decreased hash rate, neither of which I experienced all the way up through 18. I keep it at 17 when not using the machine since it's single GPU for now I have to lower that to 14 when I want to do anything else on the box.
Anyhow, thanks for the reply.