Soft clipping is a feature that should protect your speakers from damage that may occur from distortion at higher volumes. I generally keep it activated on my NAD - even though I don't drive the system at high volumes. If you have kids (who may monkey around with the system) or drive the system at high volumes, you may want to consider keeping it on.
Here's some info from NAD's site about soft clipping:
NAD Soft Clipping Any amplifier that is overdriven (asked to generate levels beyond its undistorted capabilities) will produce distortion (clipping). The result is not only very harsh sound but often damage to speakers -- especially tweeters. The selectable "Soft Clipping" feature on NAD amplifiers gently transforms the music waveform as the point of clipping approaches, resulting in much clearer reproduction and simultaneous protection of speakers. One very valuable time to consider using the soft clipping option is during a party. As more and more people crowd into a room, and create more and more background noise, it is all too easy to keep setting the volume higher without realizing just how high you have turned it up. Switching in Soft Clipping will greatly reduce the chance of damage. Nothing, however, can absolutely guarantee protection against cranking volume up and leaving it there for a prolonged period. So it is best to use Soft Clipping as temporary protection until you can get to the volume control to set loudness at a more reasonable point.