Mine are always set to 3 balls.
Specials award points rather than a credit.
I don't limit number of extra balls, mainly because unlike older games they're not easily repeatable and the difficulty increases exponentially to try and get them.
Every setting that can be set to automatically reflex is set as such, that way the difficulty ramps up as you get used to the machine.
On MET for example, this includes Ball Save Time, Combo Extra Ball (currently need 30 combos for an extra ball - Combo Champion is 23!!), Coffin hits Extra Ball (currently need 25 - which I think is the max. 2nd extra ball requires 100 hits). All other settings are factory EXCEPT rather than the ball auto plunging after a coffin lock, you get to plunge yourself. I did this to allow myself a breather, but it has the added bonus of letting you have another skill shot.
I never set replays to extra ball. If you're having a bad game and need an extra ball you won't reach the score, if you're having a good game you shouldn't need an extra ball 'donated' to you. I think you should have to work for the extra ball.
The most ridiculous machine (IMHO) I've ever played for ease of play was a
BSD on site. It had little or no tilt, 4 replay levels which awarded extra ball, every other extra ball was set on it's lowest setting, the ball save seemed to go on forever. I managed over 13 Billion on it.
A close second was a MM which I had on loan for a bit. When it first came to me it managed to give me 10 extra balls (Video Mode, Destroy 2nd Castle, 10 Hurry Ups, 2 from Castle MB, Completing Royal Madness and 4 from achieving (fixed) replay levels), as well as being set to 4 ball to start with. After a couple of games I quickly changed it back to factory.
Having said all of that. It is your machine so set it up how you want so that you get the most enjoyment out of it.