State Quarter P & D Set

You said nothing wrong. It seems that the lurkers outnumber the posters here.

I suppose my answer to the main question is no. My Statehood Quarter Dansco was built from circulation without much consideration to grade; other than being in a nice and decent shape.

Answers to your individual questions are:

1) Neither mint sets nor rolls, all of my business strike Quarters came from normal pocket change.

2) I do not even know where to begin! I am not an expert on the different MS grades (I am not too concerned with it). My choices are based on my own eye appeal.

3) Good question. I do not think we ever got a solid answer, but it was previously discussed in this thread.

One problem you'd have with 'breaking open Mint sets' to fill your
Dansco is that the 2005-2008 State Quarters in Mint Sets are struck
in 'satin finish', which is a noticably different finish than a BU
business strike!

Lucky you, the 2005 to 2008 business strikes were saved in fair
quantities, and are generally higher quality than earlier issues.

For earlier State Quarters (especially 1999-2000), the 'highest MS'
coins would indeed be in Mint Sets. The quality of the 1999 business
strikes was not very good, compared to later issues. I have a Mint
bag full of BU New Jersey-D's (obtained in 1999), and they all look
like 'used bus tokens' (and, no, they weren't Struck Through Grease,
or defective).

The New Jersey is the one State design where the highest-grade coins
that I found in circulation were "P's", and when you consider that I
live in Denver, that says it all about how well those New
Jersey-D's were made.

A few people on this forum have albums full of State Quarters
that (purposefully) contain only coins sourced from pocket change.

These were/are truly 'collected', for the sake of collecting.

PCGS and NGC will note the Satin Finish on the slabs.

PCGS slab = MS(grade)SF ie: MS69SF
(PCGS also had special "Satin Finish" design slabs in 2005)

NCG slab = (year) (mintmark) SMS 25¢ ie: 2008 D SMS 25¢
(SMS = Special Mint Set, in the numismatic world these initials
normally refer to the 1965-67 U.S. Special Mint Sets issued in
place of the traditional Proof and Mint Sets for those 3 years)

I have two folders of 50 State Quarters that are MS62+ and
that were sourced exclusively from coins that I received in change in
retail transactions! They are all D's, except for the New Jerseys...

I just got two nice BU American Samoa-D's in my change today, so yes
I do have some (D) Territorial Quarters of comparable grade that I
have received in change...

Admittedly, this may be stretching the definition of 'circulated'
coins, when the only 'circulation' was from an opened BU roll in a
cashier's drawer to my pocket flips...

I'm only lacking about three "P" Mint St. Qtrs. to have a complete P&D album.
But, similar to Jbuck, my "P's" were just the best examples from pocket change. The "D's", I got from Uncirculated rolls unopened by the bank (standard Biz. strikes)......(and they're awful purrrrty !)
Then, I have a "D" Mint only album, which is complete.

(I cashed in most of my rolls of BU Qtrs. I decided that I didn't have the room or the will to keep these. I made the albums I wanted......good enough.)
Like you, I'm not going to "crack any Sets" to procure high grade qtrs. to put in my albums.....I'm happy with what I have now.

Where, for me, this theory could be different though........is with the Presidential dollars.
I've been getting them from the bank when they come out and putting them in albums....(and I have rolls of each Pres. in the first year only)
But, each year, I've also been getting the Presidential Proof Sets.....and I intend, at some future point, to crack those Proof Sets open and put them into a nice album, whereas I will not do that for the State Qtrs.
These Pres. Dollars, I feel, will need all the help they can get !
And I would just rather have them in Proof beautified condition in ONE place.......an album. Instead of 10 years or so of plastic holders.