For my part, I use the Testor's purpose made airbrush thinner. A little bit more expensive than alcohol or water, but after experimenting around, I find I get a better finish with their thinner, especially on the light colors.
Jeff's ratio is exactly what I thin at if I'm shotting at that pressure. Usually what I do, though, is go for something closer to a 50/50 mix of paint to thinner and shoot down around 20 psi. The only reason for this, though, is that I paint in an apartment, and cut down the air pressure to keep down on the overspray.
-Devin