Point of source pickup by Shop Vac.
Point of source pickup by Dust Collector.
Airborne dust filtration by overhead unit.
Air exchange by exhaust fan.
For proper air fiitration you need all 4, depending on the operation underway.
Sanding makes the greatest amount of fine dust, so it's best to get it right off the machine before it can get airborne.
Sawing and routing makes a combination of fine dust and very small dust chips whether it's a miter saw, a table saw or a bandsaw. The dust ports on most of those machines are NOT very effective and you may need a combination of the shop vac and larger dust collector. Even then, it's not a given that you will get all the dust and the overhead air filter is needed.
Planing and jointing make larger chips and usually a large dust collector is fine for those operations.
When the shop gets too much airborne dust to filter, it's best to just exhaust the contaminated air outside.
In my shop I use all 4 types, but being lazy I often forget to use one of them for just a quick pass. The bandsaw is a "sleeper" when it comes to making dust and it generates more than you might think. My bandsaws have 2 ports, one 2 1/2" under the table for a shop vac and one 4" at the bottom for a dust collector. It does a fair job, but not totally efficient.
Some woods have an obnoxious smell when cut into, others have a more pleasant odor. Some are also toxic, so you want to get that dust collected immediately.
Some people are more sensitive to certain wood dust than others, and begin sneezing and coughing when exposed. You need to establish your own personal limits and work to eliminate the offensive dust. Bill Pentz has an entire website devoted to dust collection from both a medical and engineering point of view. It is worth reading for certain:
It goes without saying that a personal respirator will reduce the intake of contaminated air to harmless levels.