I have had good luck with the red clutches. Never used the blue ones much. If the unit is built right, don't think it makes much difference, bottom line is they are all basically paper glued to a metal disc, they will just not tolerate slippage. The clutch pack clearance depends on how many discs in the drum and how the drum is used. The general rule is .010 per clutch, so a 4 clutch drum should have .040 clearance. On the 727 the rear clutch, or I call it the input drum is applied in all forward gears so it can get by with a little less clearance in a pinch, and I use smooth discs because I want all the holding power I can get. On the forward or direct drum I want serrated discs because this clutch has to engage and disengage when shifting. the serrations allow oil to control this application better. Main issue is on a 727 the band has to release and then the direct clutch has to apply to get 3rd gear. So even in a perfect transmission you always have a short time of overlap, or both friction elements applied at the same time. The key is to make the overlap time as short as possible. band lever ratio, clutch plate clearance, kind of drum, and band adjustment, all have to be juggled to make this happen perfect. When I went from a stock style drum to an aluminum drum with a stainless sleeve I wound up with a slightly tighter band adjustment to make it work right. The reduction in rotating mass of the drum affected the shift timing as well. So one size does not fit all on your question. On the 2nd gear band adjustment I do it the Gil Younger transgo way, tighten the band until the drum will not move and then back off adjustment about 1/2 turn or until I get free rotation. On the reverse band I just use the factory spec as it only works in reverse. If you have a band apply valve body, use the specs for the modifications you make in the servo, so it releases clean.