Yep, I hate noise reduction but when you play or record with it off it is to damn "white" if you know what i mean. Lots of highs hissing like mad men. I have learned you have to record with it on and playback with it on and just fix it with the eq. I know it is a pain in the ass. But it is the only way that you will get rid of the white noise.
Hope i helped,
Rcord with it on and playback with it on. It should be ok.
But a better way for making tape dubs of a clean original (CD, good LP etc) is to get a great quality chrome tape like TDK-SA. (71 db S/N ratio) and record as hot as you can. Very frequent peaks at +3db. Because the signal is so hot, the playback volume can be very low. If it is 71 db or less you won't hear the tape hiss on a good tape.
Test. Put the blank tape in and listen with headphones. Crank the volume to hear loud tape hiss. Lower the volume so that you don't hear any tape hiss. Raise the volume to the point where having the dolby on or off makes no difference. Record as hot as you can and playback at that (low) volume.
If I were you I would get a Hum/ Hiss eliminator or a would get a Behringer Denoiser to clear out that sound, and if you want even more clarity, besides getting the noise eliminator I would get a BBE sonic maximizer 462 or 862. These two pieces of equipment would cost you from $550-$700. If you can get these equipments, to top of your recording I would use a high resolution tape for example the one posted in one of your reply. But if you can't then I recommend you to follow the instructions in your second reply "the one with the tape suggestion"
Compact cassette is still a strong format polularity and convenience wise, but in my opinion spending even $300 + to try and fix a compact cassette sound is not worth it. For the the price of those noise eliminators ($700 U.S.) one can buy portable minidisc recorder/player AND a 2x2x6 CD-rw recorder AND a 6 Gig hard drive for your computer.