Since almost every single version has been suggested at this point, here's what I'd personally do:
Try 7.6.1 first, especially if you don't have any particularly big disks (over ~8GB, or over ~36 if you're okay with partitioning). Add the updates from system7today to get the best possible OpenTransport and AppleShare versions, as well as Speed Doubler 8.
Next, try 8.1. If you have particularly big volumes, like you want to capture video onto a really big-and-fast SCSI disk or you have installed a SATA card, 8.1 should probably be the minimum version you use.
Then, try the newest possible version of 9 that system will run, it looks like that's 9.1. The main advantage of 9 will be running slightly newer apps than some of the older versions or if you want to do some stuff with, say, Mac Manager, Keychain, Multiple Users (without hunting down At Ease or At Ease for Workgroups, anyway).
The system will run 7.5.5, but I wouldn't bother, fully loaded, 7.6.1 only uses like one more meg of RAM and 7.5.5 is only relevant if you want, say, PowerTalk.
I wouldn't bother with 8.5 or 8.6. They are upgrades over 8.1, but 9.1 isn't enough bulk over those that I would really ever bother with them unless there's something totally crazy that for sure won't work in 9 but will (for whatever reason) in 8.5 or 8.6.
Anyway, for me, even back in the day (or at least the second back in the day) a lot of the the fun in older machines that I wasn't using productively was always trying different OS versions and software, so I would say it's worth having as many of them on hand as you can and give them all a whirl.