If you're trying to go fast you want the highest manifold pressure your engine will give you, full military, or emergency (wep) power, and high rpms.
If you're trying to save fuel, it's a little more fuzzy, I've heard two things but haven't tested either myself. Both are concerning RPM management. One school of thought says that reducing RPM's will help you cruise and save fuel. The other school says the manifold pressure, or throttle settings are the only things that effect fuel consumption. And it's up the individual planes which throttle setting will give you the best fuel economy anyway. One thing that reducing RPMS will help with is the gliding characteristics, so if you're deadstick and trying to get that last few yards to make it to the field, reduce you're rpms and you can stay in the air a little longer.
Engine management in this game is pretty simple really.