The other day I found an old medium light rod in my dads basement that was rated for smaller lures.  Ive been fishing for trout lately and had a couple of 1/8oz crankbaits I wanted to try out.  The rod should have been fine but I didn't have a lighter reel so I just used the only one I had which was spooled with 10lb test.  Needless to say the lure was to light to cast properly with such heavy line so I ended up just tossing it in the creek, let the current take it along, and then retrieved it but still managed to catch 1 fish.  Anyway, the million dollar question is, how do you tell what size line would be best for certain lures and what would be the best size for 1/8 oz ones?

Light lures like that are usually used on an UL setup, with 2-6# line.

I used 4# Trilene XL almost exclusively back when that was about the only kind of equipment I used.  Now I have 10# braid (4# mono equivalent) on my lightest powered spinning rod, and 8# mono on a ML rated for 1/8-3/8 lures.  I would drop down to 6# if I were using the next size smaller spinning reel.  Don't feel I need 200 plus yards of line were I to spool 6# on my current reel!  

Yo-Zuri Hybrid #4 (.009" diameter, 8.5 lbs breaking strength)

Any quality 4# test mono will suffice for what you are trying to do.

I can't get myself to go less than #6 with an ultra lite.  I do throw 1/8 jigs with #15.