As far as I know the v7 flag is the latest. It won't suppress any optimizations that 9i wants to do. You use native if you want your program to run also on oracle 6. If you want your program to run on oracle 7 and up then v7 is fine. I use native flag when I program because I don't know how it can ever be bad.
Developers continue using dbms_sql because NDS cannot do everything dbms_sql can. With dbms_sql you have more control and it is possible to write code that runs faster and uses less resources than NDS does. Of course it is possible that your developers do not feel comfortable with NDS yet.
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