Here's my 2 cents, and it depends on the kind of line you're fishing.
Fill your spools all the way with mono since it is soft and more manageable than other lines. When I mean all the way don't overfill them. Mono is much easier to cast (for me) than fluoro, although I use fluoro on more of my setups than mono.
Regarding fluoro and braid, since they are more stiff, definitely leave the 1/8" -- maybe even more. It all depends on what works for you. If you experience problems and have too much on, you can always take it off. This helps to control line jumping off the spool, especially with spinning reels. Seems like if I fill a baitcaster completely with fluoro it is more prone to backlash and tangle. If you fill a spinning reel to capacity with fluoro, you will have some major problems.
These tips work for me, and I'm sure they'll work for you regardless of whether or not you're using a baitcaster or a spinning reel.
Mono = full spool
Fluoro = 1/8"+ less capacity
Hope this helps you out!
