Ihave done research on this have seen many different "best" ways. I am using 8lb yo-zuri hybrid. Some say to have the string come over the top of the spool, and others say from under the spool, and still another says to have the top of the spool facing the reel. Which is best? and what type of knot is best to use to start?

Run the line through your guides and around the spool,

the direction isn't important. Tying the line to the spool

isn't particularly important either, but I use an Arbor Knot:

http://www.animatedknots.com/arbor/index.php?LogoImage=LogoGrog.jpg&Website=www.animatedknots.com#Autoblock

8-)

For a baitcaster:

First, be sure the line runs through the reel's eye.

Not kidding.  If you miss the eye then you will have to respool.

Second, keep line tight with your fingers.

Third, run line through a wash cloth with a "wet spot" sprayed with KVD's Lure and Line Conditioner.  Run all the line through the "wet spot" and don't forget to rewet the wash cloth as you spool.

You can spray the line on the spool a few times as you spool.

For a spinning reel:

Same as above but have the line come off the bottom of the line's spool.

Or have the line go on your spinning reel in a counter clockwise manner as the line comes off of the spinning reel in a clockwise manner.

In both instances, do not over spool the line on the reels.

And that's about it!