Start somewhere in the mid range of the adjustment. The tools you are using should show minor signs of lubricating oil. It shouldn't spray or drip out the exhaust but you should be able to feel an oily residue at the exhaust. Adjust the the drip rate until you get that slightly oily feeling at the exhaust.
As mentioned, that may be different for different tools. All that being said, you have made a wise choice to use a lubricator that will keep your tools consistently oiled. You will be rewarded with long life on your air tools.
As the previous poster mentioned, DO NOT use any air hoses or lines that have had a lubricator on them for spray painting. Oil (and silicone of any kind) will give you so many fits during spray painting that it will drive you crazy! Bypass the lubricator and only use a clean air line for spray painting, however, keep the drier/filter because water is equally bad for spray painting.