If you erase a file directly, there is no point in running a free space erase to clear the same data a second time.
If you are clearing a drive (and it isn't a system drive), the best thing to do is format it (quick format will do), then run a free space erase. To clear a system drive, you have to connect it (by internal mounting, caddy or dock) as a non-system drive to another machine and erase it from there.
Free space erase takes a long time, and can stress the drive, so is not really suitable for, say, daily use. In normal use (e.g. to securely empty the Recycle Bin), I use file erasing. If I'm maintaining a system, I might use a free space erase (perhaps after defragmenting the drive).
First/last 16K erases what it says. The file is made unusable, but not completely erased. Clearly not a good idea for, say, a sensitive database file. Remember that disk/sector editors can read the drive without help from the file system and can find non-erased data, even though they may not be able to determine which file it comes from.
David