We are using WCS ver 184.108.40.206 and WLC ver 220.127.116.11.
What is the best method to use for limiting SSID propagation ie WLAN override or AP Groups?
With WLC 4.2 .x.x you would be using WLAN override I believe
Enabling WLAN Override
By default, access points transmit all defined WLANs on the controller. However, you can use the WLAN Override option to select which WLANs are transmitted and which ones are not on a per access point basis. For example, you can use WLAN override to control where in the network the guest WLAN is transmitted or you can use it to disable a specific WLAN in a certain area of the network.
From this doc;
Once you create a new WLAN, the WLAN > Edit page for the new WLAN appears. In this page you can define various parameters specific to this WLAN including General Policies, RADIUS Servers, Security Policies, and 802.1x Parameters.
**Check Admin Status under General Policies to enable the WLAN. If you want the AP to broadcast the SSID in its beacon frames, check Broadcast SSID.
Note: You can configure up to sixteen WLANs on the controller. The Cisco WLAN Solution can control up to sixteen WLANs for Lightweight APs. Each WLAN has a separate WLAN ID (1 through 16), a separate WLAN SSID (WLAN name), and can be assigned unique security policies. Lightweight APs broadcast all active Cisco WLAN Solution WLAN SSIDs and enforce the policies that you define for each WLAN.
From this good doc;
In 5.x and 6.x versions you will use AP Groups, because in WLC 5.x versions, WLAN Override has been replaced with the "AP Groups" feature;
Creating Access Point Groups
After all access points have joined the controller, you can create up to 150 access point groups and assign up to 16 WLANs to each group. Each access point advertises only the enabled WLANs that belong to its access point group. The access point does not advertise disabled WLANs in its access point group or WLANs that belong to another group.
To learn more about AP Groups check out George's excellent video
Hope this helps!