Your 1/8 twist should handle most bullet loads that will fit into the magazine, from 45gr-69gr...You will find that when you get into the heavier bullets, such as the 75gr A-Max, they have to be fed one at a time due to overall length and will not fit into the magazines.. Some 40gr bullets, may spin apart before getting very far down range.
As to powders, I've always had great luck with Winchester 748 for all bullet weights and normally would suggest that you pull up a burn rate chart for comparable powders, but I noticed that there has become a wide difference between charts produced by Hodgdon and other sources as to the rankings...It used to be that W-748 was nestled in between Ramshot's X-Terminator and TAC, now it's showing up on the much slower end of the Hodgdon chart, but not on others,,,,I'm not sure it it was a misprint or an actual change in the formula..
Depending on your particular firearm, and what is available locally, those listed on the burn rate chart from X-Terminator (faster) on up the list to BL-C2 (slower) generally work well, depending on bullet weight...
Which ever powder you decide to try, always, but always keep in mind that the case capacity for the .223 is small enough that large increments in powder charge changes can produce some serious over pressure problems and stuck bolts, split cases, etc,,,are no fun to deal with under the best conditions..When I'm building test loads for accuracy and function, I increase in .1gr powder increments and only change one factor at any given time..Generally, I start at standard seating depth of magazine length (2.26") and very seldom seat shorter unless using the lighter weight (shorter) bullets