The optimal CPU cycles is going to be dependent on the speed of host system. What is ideal for one computer may be way too fast for another system. Additionally, some games are more demanding than others. About the only thing that you can do is to experiment to find the right settings for your computer and the game that you are trying to run. CPU cycles and frame skip can be adjusted on the fly by pressing Ctl+F12 to increase and Ctl+F11 to decrease cycles. Likewise, frame skip can be adjusted with Ctl+F8 and Ctl+F7.
The best thing to do is to find a good median point for YOUR computer and set that in your dosbox.conf file. From this starting place you can adjust it for the game that you are trying to play. Once you have found the ideal settings for a specific game, you can make a DOSBox shortcut, pointing to another config file just for that game.