Hi Dave,
I get more than a few "your kidding" looks when I recommend or say that I use 3x tippet. I also get a lot of "I should have listened to you about the 3x tippet" when they loose the pig of the season. On the other hand I also hear "Broke the _____ 3x like it was nothing" a few times too. LOL
For smaller flies as a rule of thumb: as big a tippet I can get through the eye, usually 4X or 5X . Obviously there is a point of diminishing return or uselessness with tiny flies. As a general rule,with the fishing encountered on the Madison, I don't see much small stuff and I can't really imagine landing even a 16 inch trout on 7X or 8X. Not to say that it can't be done or hasn't been done it just seems pointless when you consider the well being of the trout, unless of course you are going to harvest it.
Again, very unscientific, it's just what I have found works for me.
Jim