Personally I like the same preferences that Micah uses. I enable indent with 4 spaces, turn of line wrapping and enable line numbering. Read a more detailed description in Micah’s post.

Plug-ins I use:

- Gemini
A plug-in which auto-completes parenthesis, brackets and so on (the characters: < { [ ' " " ' ] } >) and nicely indents and places the cursor where you (me) want it. This plug-in is an absolute life saver!

Before return is pressed (notice that there is no “}”):

{//Cursor here

After return is pressed:

{
    // Cursor here
}

- Symbol Browser
Shows a list of classes, functions, enums and class fields.

- Snippets
This plug-in allows you to define snippets of codes which appear when you use a tab-trigger. This one saves you a lot of time. Make a for-loop with a few keystrokes. See my post on how to use snippets.

Screenshot of my gedit (oblivion theme):

If you use an awesome plug-in or something for gedit please leave comment!