I've heard you can overstabilize a bullet resulting in reduced accuracy (I think it causes it to corkscrew somewhat due to the torque).
You can rip the jacket on thinly jacketed bullets if you run them at too high a velocity through a very fast twist bbl. According to the Speer reloading manual, as long as you keep thinly jacketed bullets under 2800 fps they're fine in a 1:7 twist barrel .223. According to US Army FM 23-9 the M16A2 (1:7 twist bbl) is just as accurate as the M16A1 at 274.2 meters shooting M193 Ball (55gr FMJ) ammo. However, the M16A1 wont stabilize M885 ball (62gr FMJ w/ steel insert). Needless to say, I don't buy the whole over stabilization thing.
Will either twist rate decrease bullet velocity?
Note enough to matter with a .22 LR.
Will either twist rate improve accuracy?
The 1:9 will certainly be more accurate with 60gr ammo, but that's not mainstream .22 LR ammo. I don't know if any .22LR ammo gets even the light bullets moving fast enough to start ripping them in a 1:9 twist bbl. Going back to the 60 gr. ammo, I also don't know of any .22 LR ammo that moves a 60 gr bullet fast enough to get it out to ranges where the increased accuracy of the 1:9 twist will even matter.
Is there a benefit in accuracy or velocity with either twist rate?
The 1:16 is going to have less friction. Therefor it will heat less quickly than 1:9, and probably have very slightly higher velocity. The 1:16 twist barrel will probably also last slightly longer than the 1:9, but .22 LR isn't a barrel burner.
The bigger issue, to me, is leading. 1:9 and faster twist in .22 bore (.224 diameter) barrels is used to stabilize longer (heavier), hard jacketed projectiles in .223 & similar calibers. 22 LR barrels are .221 diameter. They're typically 1:16 twist because there are few (if any) .22 LR projectiles that need anything faster to stabilize them. Because .22 LR projectiles are typically plated or plain lead (rather than actually jacketed) they're rather soft. As a result, any bbl. twist faster than what's needed to stabilize .22 LR projectiles is going to lead excessively.
In .223/5.56 I'm a fast twist proponent (based on faster twists allowing the user to shoot the widest range of projectiles). I'll recommend the 1:16 twist for .22 LR to minimize leading, and for the other reasons listed above.