I both etch and bleach/spot. If the black spot on the print is small, I'll etch, as described above, with the tip of a small scalpel. The object is to very lightly remove the emulsion by scraping (not digging) so that you don't go all the way through, but just remove enough to hide the black spot. This is a real skill that takes practice. If done correctly, one can just dampen the etched spot and restore sheen, Often, however, one goes completely through the emulsion anyway; sometimes it's even necessary to get rid of the spot. In this case, I'll spot back with the right color combination of dyes mixed with a bit of gum Arabic. This latter helps restore the sheen.
For larger spots or scratches that are still too small to easily retouch on the negative, I'll bleach the print. Bleaching an almost-dry or dry print is best, since the bleach won't spread in the emulsion so much. I use a ferricyanide/bromide bleach and a toothpick usually, on an untoned print while I'm printing (so I can discard the ruined ones and keep only the successes). The resulting white area then gets spotted with regular spotting dyes. The problem with this method is that a black spot on a light area needs a lot of bleaching and usually bleaches quite a bit of the surrounding area as well. Often, I'll prefer to etch.
If the job is easy enough, I'll spot the negative. The problem is that a very small spot on the print is a very, very, very small spot on the negative. Something like a fine-point Sharpie used on the neg leaves a pretty bit white hole on the print that needs spotted back, so I'll usually only spot the negative if the defect is rather large.
Best,
Doremus
