Your tabstop must be 8, or you're just asking for trouble.

I use a two-space indent, but four also seems reasonable; I find that eight is overkill. You should standardize this within your team or project, or if you're contributing to someone else's code, use their value.

Conversion of tabs to spaces or vice-versa is optional. I'd let this vary, even from file to file or within a file, since people use different editors and typing styles, and the indents can be easily converted back and forth automatically as long as you stick with the standard tabstop.

(I use Apple's "TextEdit" editor, which lets you set the number of spaces to be used for the line/block indent commands, and which automatically converts leading runs of spaces to tabs.)