During normal drivng, just keep it in D. The "hold" in the 323 is equivalent to o/d off.

When you put it in o/d off or keep her in lower gears, the engine will also tend to stay in gear or "engine brake" thus giving you more control when you need it in situations like driving on mountain roads or in slippery conditions. Engine braking the matic tranny on a steep mountain road is important for it will put less load on your brakes.

In addition, always check your ATF level to make sure it's filled for a tranny that lacks ATF will lead you to an overhaul. You have to drain and change the ATF every 40K as well.