What Ensembl genome version should I use for alignments? (e.g. toplevel.fa vs. primary_assembly.fa) When you look at all the genome files available from Ensembl. You are presented with a bunch of options. Which one is the best to use/download?

You have a combination of choices.

First part options:


dna_sm - Repeats soft-masked (converts repeat nucleotides to lowercase)
dna_rm - Repeats masked (converts repeats to to N's)
dna - No masking


Second part options:


.toplevel - Includes haplotype information (not sure how aligners deal with this)
.primary_assembly - Single reference base per position


Right now I usually use a non-masked primary assembly for analysis, so in the case of humans:
Homo_sapiens.GRCh38.dna.primary_assembly.fa.gz

Does this make sense for standard RNA-Seq, ChIP-Seq, ATAC-Seq, CLIP-Seq, scRNA-Seq, etc... ?

In what cases would I prefer other genomes? Which tools/aligners take into account softmasked repeat regions?
There's rarely a good reason to use a hard-masked genome (sometimes for blast, but that's it). For that reason, we use soft-masked genomes, which only have the benefit of showing roughly where repeats are (we never make use of this for our *-seq experiments, but it's there in case we ever want to).

For primary vs. toplevel, very few aligners can properly handle additional haplotypes. If you happen to be using BWA, then the toplevel assembly would benefit you. For STAR/hisat2/bowtie2/BBmap/etc. the haplotypes will just cause you problems due to increasing multimapper rates incorrectly. Note that none of these actually use soft-masking.