Dear Shivani,

1. You can use a lower reference voltage but thats not a good practice. Its always a good Idea to use the highest refence voltage possible with ADC and that too using a precision Vref source. And you should amplify your signal appropriately so that You get maximum signal swings take care amplify in such a way that you get max ADC value at max signal value to be measured.

You may ask why use higher reference voltage and amplify signal to max possible?? It is because when you deal with higher voltage say 5V your resolution with 8 bit ADC is 19.60mV where as with 1V it is 3.92mV. When using the 5V stuff any Ground/signal noise less than 19.60mV wont create any measurement errors. Where as with 1V stuff any Gnd/Signal noise greater than 3.92mV will spell measurement errors. Hope this clears your doubts regarding resolution and Why Max voltages?.

Often you hear that one should use splitted ground / power planes when dealing with analog and digital on same PCB. Also you might have noticed separate AGND [ Analog Gnd ] and DGND [ Digital Gnd on some of good ADC? Did you ever tried to know why that is? It is because digital chips inject a lot of ground noise into the Digital ground plane and if the same Gnd is used for Analog Measurement reference. It will create measurement errors. More errors if you use 1V reference and bring the resolution down to 3.92mV. To minimise such measurement errors the Gnd which is used for anlog signal measurement reference must be quite free from ditial noise. And hence you use separate Gnd planes and join the two planes and one an only one point in such a manner that no digital ground return flow through analog Gnd plane.

The second thing you asked was if you can have 3.90mV [ 1Vref] with an 8 bit ADC and with a 10 bit ADC you measure 4.88mV [5Vref]. why at all use a 10 bit ADC.

Dear it is not just resolution but rage too that matters. 8 bit ADC is something like having a 2.5Kg weighing scale with 10gm resolution and 10 bit ADC can be compared to 10.25Kg weighing scale with 10gm resolution. I hope you understand the range and resolution stuffs.

Conclusion->
1. 8 bit ADC can be used in a manner that they give resolution btter than 10 bit ADC but the range is smaller with 8 bit ADC.

2. When making the resolution with ADC's smaller by reducing the Vref the noise margin is also reduced.

3. One must always use maximum Vref possible with ADC and also have maximum amplification of signal to be measured this gives highest noise margins and improves the measurement accuracy.

4. If you want to work with smaller voltage measurements without amplifying them it is possible? but remember your board must be appropriately designed to have very small noise margins.

5. Getting higher resolutions from ADC's is not a childs play 8 bit is very easy to get even with a poor layout. But when it comes to 10 bit the board must be appropriately designed. Getting resolution higher than 12bit is no less than magic. It needs lot of experience and reading for designing systems capable of achieving 12bit+ resolutions.

Regards,
Prahlad Purohit