This will vary from plane to plane depending on design, and the best method to use for a particular airplane would be listed in the engine out procedures in the POH/AFM.
When the manufacturers are flight testing the airplanes they try various combinations and tell you the absolute best one so that you can get the best performance out of the airplane in a potentially dangerous situation. Fly your particular airplane by the book to ensure that the airplane does what the POH says that it will do.
The Seminole POH says:
Trim the aircraft as required and maintain a 3° to 5° bank toward the
operating engine. The balI wiII be 1/2 to 3/4 out for minimum drag.
The Diamond Twin Star POH says:
Establish minimum / zero sideslip condition (approx. half ball towards good engine; 3° to 5° bank).
The Cessna 441 POH says:
The one engine inoperative best rate-of-climb speed at various altitudes
is shown in Section 5. Best single-engine climb is attained with the wings
banked approximately 3° to 4° and with a 2/3 to 3/4 ball slip into the
operative engine when the airplane is at low airspeed and heavy weight. As
airspeed increases and/or airplane weight is significantly reduced, the 2/3
to 3/4 ball slip becomes less important.
I'm seeing a trend here among the light twins. :-)
On the other hand, in the jets that I have flown, we are taught to remain wings level and center the ball with the rudder:
Here is what the Lear 60 AFM says:
Use rudder pedal force as necessary to maintain slip/skid indicator centered.
The Falcon 50 AFM doesn't mention it at all.
This isn't the case for all jets though. The A320 Flight Crew Training Manual says:
In flight, if an engine failure occurs, and no input is applied on the
sidestick, lateral normal law controls the natural tendency of the
aircraft to roll and yaw. If no input is applied on the sidestick, the
aircraft will reach an approximate 5 ˚ constant bank angle, a constant
sideslip, and a slowly-diverging heading rate. The lateral behavior of
aircraft is safe.
However, the PF is best suited to adapt the lateral trimming
technique, when necessary. From a performance standpoint, the most
effective flying technique, in the event of an engine failure at
takeoff, is to fly a constant heading with roll surfaces retracted.
This technique dictates the amount of rudder that is required, and the
resulting residual sideslip.
As a result, to indicate the amount of rudder that is required to
correctly fly with an engine-out at takeoff, the measured sideslip
index is shifted on the PFD by the computed, residual-sideslip value.
This index appears in blue, instead of in yellow, and is referred to
as the beta target. If the rudder pedal is pressed to center the beta
target index, the PF will fly with the residual slip, as required by
the engine-out condition. Therefore, the aircraft will fly at a
constant heading with ailerons and spoilers close to neutral position.