Modelspace:
You can draw and detail all components without regard for the final plotting scale because everything should be drawn full size and the plot scale will have no effect on them. You may be tempted to copy and scale up areas which require additional detail, but you should not do this. Rather, you should simply copy the area requiring extra detail to somewhere out of the way, hack away unneeded portions and leave it be, for now.
Once you you have the subject detailed, it is time to do a bit of planning. For our purposes we will presume that this particular drawing will include building elevations to be plotted at 1/8"=1'-0" on an 'E1' size (30"x42") sheet of paper. If you are not sure what scale you will be plotting your finished drawing to, now is the time to determine it because decisions to be made for annotating and setting up the modelspace drawing will require the final scale.
When you have determined your plot scale, you can calculate your 'Modelspace Component Factor' ('MCF'). The MCF is determined by dividing the plot scale into the plot base. For 1/8"=1'-0", the formula is 12/.125 for an MCF of '96'. For 1/2"=1'-0", the formula is 12/.5 for an MCF of '24'. For 3"=1'-0", the formula is 12/3 for an MCF of '4', etc. We will use the MCF as we continue to develop our modelspace components.
We have a standard title block and border that we use for shop drawings and for the 'E1' size the final plotted border measures 28.5"x40". We next create a rectangle in modelspace which shows the paperspace border boundaries. This serves as an aid in laying out our modelspace components. Based on our MCF of 96, our rectangle size is 228'-0"x320'-0". That is: 28.5*96=2736=228' and 40*96=3840=320'. We generally place this template on the 'DefPoints' layer so it will not plot.
Our DimStyle settings are set based on the actual plotted size we want to see. That is, the text height is 3/32", the arrowheads are 3/32", the offset from origin is 1/16", etc. These settings will work no matter the plot scale we will eventually use. The setting in the DimStyle for different plot scales is the 'Overall Scale' in the 'Scale for Dimension Features' section of the 'Fit' tab. This should be set to match your MCF. For 1/8"=1'-0", the overall scale is set to '96'.
For notations, references, bubbles and other callouts, you again use the MCF multiplied by the desired plot size of a the component to determine the size it should be drawn in modelspace. For 3/32" plotted text, the text should be drawn at .09375*96, or 9". A 3/8" plotted circle would be drawn 18", or .375*96.

Paperspace:
When the modelspace components are substantially correct, you can move on to the paperspace layout. The default AutoCAD setting is for a viewport to modelspace to be automatically created when you first switch to paperspace. If this does not happen you can create one using the 'MVSetup'. When it is created, resize it to match the border using its grips. The viewport should usually be created on 'DefPoints' or another non-plotting layer. Now you should be looking at a viewport with your modelspace zoomed to extents. Switch to 'Floating' modelspace by clicking the 'PAPER' setting on the status bar, or by typing '_.mspace' at the 'Command:' prompt (we have a toolbar button set up for that).
Next, we will scale the viewport. We'll use the 'Zoom' command and a scale factor, which is simply the inverse of the MCF. For 1/8"=1'-0", we use 'Zoom 1/96xp'. For 1/4"=1'-0", it would be 'Zoom 1/48xp'. Now you can align the modelspace border with the paperspace border by using the 'Pan' command. When you have it set up as you like, lock it in place by switching back to paperspace (click the status button or type '_pspace'), click the viewport to activate its grips, highlight one of the grips, right-click and select 'Properties', and set the 'Display Locked' field to 'Yes'.
Back in the first paragraph of the modelspace section we created a snippet of the main drawing and stashed it aside to use for a detail. Now we'll set it up. Create a new viewport, on a plottable layer for its border, and size it to fit as a detail on your main border. Zoom in close to it so the detail border is a workable size. Switch to modelspace so you can work through the detail border. Hit 'Ctrl-R' to switch focus from the main viewport to your detail viewport. Within the detail area your modelspace components should be zoomed to extents. Zoom in to the detail snippet you stashed away until it is sized roughly the way you want it and then apply a new MCF and do a 'zoom 1/8xp' to finalize its scale(1/8xp will zoom it to 1 1/2"=1'-0"). Now with the view the way you like it you can apply dimensions directly through the viewport. Simply set the 'DimLFac' variable to '1' and the dimensions will be scaled to match the scale of the viewport. This is convenient so you do not need to create a special DimStyle for a few details AND you don't have to worry about the scale factor.
Now switch back to paperspace, lock the viewport, and zoom extents. You should be set to plot at 1 to 1.

We have presented a very brief look at utilizing a paperspace layout, but hope we have touched on the main facets for their effective use.