What is the best way to convert recipes to gluten free, and how much xanthan gum is needed?

This depends of course on what you are using for gluten-free flour, but according to Khymos' Data (PDF warning) and corroborated by my own experience, 1.5% is about the maximum concentration of xanthan you would ever use, beyond which food starts to get really slimy.

The recommended amount for flour is going to depend on exactly what kind of "gluten free flour" you are using. For example, you'll see at least two recipes in the link above, one using equal parts soy and rice/potato/corn starch and the other using rice flour and corn starch in approximately a 3:1 ratio (with tapioca starch added for what I presume to be heat stability).

However, xanthan gum is pretty forgiving, so you can experiment a little with the quantities and not have to worry too much. Personally, I would recommend starting with 1% as a baseline (that's approximately 1/2 tsp per cup) as well as 0.5% guar gum (1/4 tsp per cup). Guar gum has viscosity synergy with xanthan gum and will give you much more stabilizing bang for your buck.

If that's not stable enough, add up to 50% more (keeping the xanthan:guar in a 2:1 ratio). If it's too sticky/slimy, lower the quantity. Most recipes I've seen use close to a 1% ratio so that should be the best starting point.

This may not be a great answer, but Bob's Red Mill makes a great all-purpose, gluten-free flour that is 1:1. They also provide suggestions of the amount of xanthan gum to use, depending on the application (muffins, bread, pie crust, etc). Since cake flour has less gluten than all purpose, and bread flour has the most gluten...you can vary the amount of xanthan gum to simulate this without gluten.

A confirmation and two suggestions, although this topic seems quite old.

1) The confirmation: I have been using xanthan in the 1/2 tsp per 1 cup proportion stated above and it works beautifully. If you consider a cup to be 140 g of flour and a tsp to be about 2 g xanthan, that's 0.7% ... often rounded up to 1% because I don't like doing maths when I can avoid it.

2) The first suggestion: bake by weight if you can get used to the metric system. Measuring is more accurate, as you don't have to deal with packing cups, and percentages become much simpler that in volume or imperial.

3) The second suggestion: try psyllium husk. It tends to be cheaper and it makes you regular without adding taste. I have been substituting xanthan by equal amounts of psyllium (by weight) and it works well for most low gluten recipes (pie crust, cakes, etc.). For bread you might want to go as high as 40-50g per loaf but psyllium mucilage becomes strong enough to trap fermentation gasses and allow the dough to rise. Hydrate it first or top the recipe with some extra water.

Found the second answer to my question. Per each cup of gluten free flour, add one tsp of xanthan gum! Woo hoo!