What dictates the prop RPM used during cruise?
"Dictate" is the wrong word.  Within the ranges listed in the POH, the pilot may select rpm/MP settings as he pleases to meet other criteria.   

Charles Lindbergh instructed many WWII pilots in a technique to extend range, by flying with low rpm and high manifold pressure.  This extended range by reducing the "pumping losses" required to maintain low manifold pressure.  Over long distances this technique did extend range considerably.  

Secondly, lower rpm reduces noise - remember that the propeller is the largest contributor to a propeller-driven plane's noise signature.  This is important in the terminal environment where the noise can affect the ground, but it also affects in-cockpit noise regardless of altitude.  

This answer does not contradict the former answer, but it extends it to point out that there are other important factors that the pilot should consider in selection of engine operation parameters.