I get asked this 2-3 times a week. There is no "right" or "wrong" way to LED a machine. The only rule I have is to keep to the same format for ALL the games you are going to LED out. The reason for this is that as soon as you do the first game in the line up - you will have to do the rest of the games. As to "how" to LED a game - Buy several different styles of LED. Organize them in boxes or bags and then try each of them throughout a playfield. As you try each LED, you will find the ones you like in the game. Stick to those LEDs for all your games. Don't be afraid to experiment - I remember Greg giving me Super Brights for a ToM to be placed behind the translite. I thought he was nuts - but it looked AMAZING. This was YEARS before others started placing them there.
Personally, I use only Ablaze LEDs. Not because I sell them, but because I found these to be the best on the market - which is WHY I sell them. The "Ghostbusters Premium" range is the best on the market. They come in frosted and standard. Thankfully, the are VERY much a standard LED without looking like an extra on a "Men in Black" movie set with 5 arms and 4 SMD panels per arm. I use these for feature lamps. I use Ablaze SuperBrites 4-LED SMD for the translite. For GI, I use color co-ordinated standard #44 - depending on the game. Sometimes I use Cool Whites throughout, or in some case - like T3 - Red throughout.
I have not dipped the toe in LED for pre 90's games YET - but I have done some for customers that did look AMAZING.
Kits - I keep away from these. Rarely are they the correct ones for the game, and they suit the taste of the person who put it together.