I use 1.8 because you can use all of the new blocks in 1.8. Also you can sprint+fly in 1.8 to fly really fast.
1.7 on the server and 1.8 in singleplayer. With the "new" launcher you can switch versions quite easily ;) You can also have multiple optifine versions installed at the same time. You only need to select the version in edit profile manualy everytime you update.
1.7.10 on the server, and 1.8 when I'm offline. 1.8 has so much more to offer. Wish the server would go to 1.8 so my villagers would not be so lazy...
I recommend using 1.7.10 Optifine. For me, it reduces the amount of lag I usually get without Optifine. Although, I don't really care if 1.8 Optifine has more features.