I would say to start with standards-compliant code. Always test in a standards-compliant browser first like Firefox, or Safari/Chrome. I prefer Firefox for the addons (such as Firebug, HTTPFox and the Web Development Bar). Then work your way DOWN (and by down, I mean all versions of Internet Explorer).
Try to stay away from temporary fixes per situation or site and generalize your code as much as possible. For example, as Justin Neesner said in his answer, using conditional comments and a general style sheet for IE6 , 7, and 8 will knock out most of your problems with layout and formatting, without using (too many) hacks. You can reuse the IE stylesheets, and just place the site-specific code in it.
Use a testing platform like browsershots, netrenderder or LitmusApp so you can see what your site is doing in as many versions of browsers out there. Studying browser compatibility deeply will make you pull your hair out, but any great resource like quirksmode.org can give you information on the little gnats of incompatibility, so you don't go crazy, and bald.
As far as when do I cross/draw the line, it's 99% Internet Explorer issues, and if it's close enough to looking like FF or Chrome/Safari, I'm done. Almost like art, it's not when you're finished adding, it's when you're done removing the crap you don't want to see; that's when you know it's done.