3/16 is most common for us due to the short runs used in our kegerators and keezers. 1/4 would be used if you were running long lines for say, a commercial application. It determines the length you need. You need much more 1/4 line to give you the same line resistance as you'd get from the 3/16th.
For example. 5ft of 3/16th is equivalent to 19.33ft of 1/4".