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A further clarification is probably helpful also. When Beersmith gives you the batch sparge temperature, it is the temperature at which you want the mash to be brought up to by the sparge water addition. When I'm shooting for 170F sparge temperature, my batch water sparge addition is usually in the 195F or higher range, just to get the mash to settle at 170F.
I fly sparge; and most recipes I do call for a sparge water temp of 168 F. I keep the HLT tun at 170-174, to allow for a bit of temp loss. Sometimes I do a no mash-out ( Irish red , baltic porter, weitzenbock) and the mash is at 152. Makes for a smooth beer, no off flavours, but yield sometimes suffer a few points. See mash profile med body single infusion no mash out in beersmith
Another consideration is whether you mash out or not. Mashing out brings the temperature of the mash up to sparge temperature. I suppose a higher sparge temperature would be in order if you don't mash out, since the sparge water will be cooled by the mash. I do a decoction mash out myself (remove 1/3 of the mash, bring it to a full boil, then mix it back in) with a fly sparge.
May as well toss this in - pH. You can sparge above 200 F if you keep the pH in check. I add phosphoric acid to my sparge water and shoot for pH 5.8 at room temperature.
I'll typically drain the tun and then add my sparge water all at once, usually around 210 F - this brings my mash to right around 165 - 170 F. So if you shoot for a pH of not lower than 5.8 at room temperature on your sparge water, you will not run the risk of solubilizing the polyphenols in the grain hulls (aka; tannin extraction).
EDIT - I said "...lower than 5.8" above, but I meant "...higher than 5.8" - sparging above pH 5.8 increases the risk of tannin extraction, but you also don't want to go too low as to throw off the final balance of your beer - pH 5.8 at room temperature has been what works for me, and I have yet to experience excessive tannin extraction since I started doing this.