Well, first, let me say I was coming back to this thread to soften my comments. It's not that they don't reflect my considered position, it's just that I put it a bit absolutely and I really think everything is relative -- also the last thing I would want to do is undercut someone's confidence and comfort with their recording tools. That wasn't my intent, but it's probably how it came off.
Don't stop using those tape machines, folks. It's all good.
One thing -- while I've never used "Dolby S" it's generally a truism with any compression/expansion NR system that going into tape saturation is asking for almost certain trouble. If you think about how Dolby and DBX work, you're applying compression on record (often splitting into different frequency bands) with the notion of making the signal just that much hotter than the noise floor in problem bands -- and then 'decoding' by expanding on playback. Ergo, any tracking error (such as that from tape saturation) that you introduce in between that compression and the reciprocal expansion process on playback simply magnifies the tracking error.
Now, you might like that effect -- but you should definitely be aware of what's going on and that, for accurate dynamic tracking, saturation and noise reduction don't, as a rule, mix.
But, hey, there are no rules (as long as you don't hurt innocent animals or children), so if it
does work for your purposes, don't let me get in the way.