From my limited experience, making a traditional workbench and some small furniture (ie end tables, etc, DVD shelf unit, etc) using hand planes, it depends on the condition of the lumber, and the width/length of the boards, with length being the main factor. If you need some long boards (5' - 6' +) for a cabinet/book shelf side, I would go to 5/4 for those pieces. This is due to the amount of wood you will lose to bow and twist. A longer board will have more distortion. If your project is shorter lengths, and you cut to rough length before planing, you remove a lot of the distortion and can get by with a thinner board. Same goes for width, in which cupping is the problem. However, by splitting the board, a lot of the cupping can be eliminated without a lot of surface planing.
The reality with me is the thickness usually gets determined by whatever thickness the most distorted board cleans up to. I then dimension the rest to match. The plans, including dadoes, etc are then adjusted to the actual wood thickness I end up with. If its 7/8, I go with that. If its 11/16, then that's the measurement, altho I will sometimes leave the boards for the structure-critical elements thicker.
Hope this helps
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