When writing Cocoa Applications for MacOSX, you have the choice of either having a custom preference dialog, or using the Settings.app to manage your preferences.
Functionality wise, there is no difference at all between the two (apart from the fact that preferences in the Settigns.app can be accessed when your app is not running).
Which solution do you use and why?
The answer to that, quite simply, is "It depends."
But as a general rule of thumb; I use System Preferences.app whenever the application doesn't have its own user interface, or the settings affect related tools and helper apps (command line or otherwise) without their own user interface.
Generally speaking, tho'; as far as it can be avoided, I personally avoid extending System Preferences.app unless it truly is a system setting, or something fairly similar.
Settings that affect multiple applications or multiple users are good candidates; especially the latter.
Settings.app? That's an iOS thing. On the Mac it's called System Preferences.app.
On the Mac, you should write your own preferences dialog (or use one of the third party frameworks that do them for you).
The exception is if your app does something when it isn't running (e.g. you're a front-end for a database server, which runs in the background), or if you don't have a UI that includes a menubar (e.g. you're a system utility that augments other apps).
This is different to iOS, where app settings can go in Settings.app.
