RE: Sequence of shimming vs nitro
If the needle starts to get real peaky, or it is hard to get a good setting that holds up in the air, you may be over compressed. As CP says, you can't hurt the engine with too little compression (except for running lean). Start off with light props (smaller diameter, lower pitch) and work with them and pipe length.
The other thing to consider, is every day is different. The atmospheric pressure, temperture, and humidity from day to day will change what the correct amount of shims are for the day.
Nitro - 65-70% is racing fuel, below 40% sport fuel, below 15% weed killer.