Here's a guide:
cl_interp_ratio is the key cvar here. Default is 2 and most people try to set it to 0 or 1 because "2 causes lag!!11". This is not the case. Most people also try to keep lerp where the ping is and most people also try to set cl_interp as low as they can. All these will cause non-registering hits, even if the lerp is white.

Possible settings for low lerp:

cl_cmdrate 100, cl_updaterate 100, cl_interp_ratio 1, cl_interp 0.025 = lerp 25ms (white, but because tickrate is 66, the setting is pointless and too low lerp)

cl_cmdrate 66, cl_updaterate 66, cl_interp_ratio 1, cl_interp 0.030 ) lerp 30ms (white but still way too tight to simulate on your screen. Will cause bloody faces with 0 damage taken)

cl_cmdrate 66, cl_updaterate 66, cl_interp_ratio 2, cl_interp 0.030 = lerp 30.3ms (almost the best value, but still too tight as your ping usually is higher.

cl_cmdrate 66, cl_updaterate 66, cl_interp_ratio 2, cl_interp 0.040 = lerp
40ms. This is what i use and it's quite perfect.

lerp = your own ping + ~10-20

Source: http://www.viaclan.com/forums/showthread.php?t=13478