For a long time, I tended to aim for Large hulls as the backbone of my first serious fleets and built Huge ones as soon as I could without needing a year in the starport.

Lately, I've started building fleets much sooner, which means starting with Small hulls. I still try to build Mediums early in the game, but don't bother with larger hulls until I have serious production capacity.

AFAIK, the "right" choice here depends on the victory type you want, the tech context, and your production capacity. Smaller hulls carry less stuff and die more easily, but you can build them much more quickly, and if you have strong Logistics, a swarm of Small ships can often win against very scary looking Large and Huge hulls.

I think the most important thing I learned to do that got me into the smaller hulls was to accept some losses. I like building experienced fleets, but you can't make an omelette without breaking some eggs.

In GC2: Dread Lords, small/tiny hulls can be quite useful since enemy ships have to mass their entire firepower into one overkill shot, and thus can only shoot one only fighter at a time. Obviously, this leads to larger ships being conveniently overwhelmed by a swarm of all-attack tiny/small hulls.

In Dark Avatar and Twilight, it's different. Since each different weapon can now target a different ship, the usefulness of smaller craft depends largely on tech rate. On Very Slow and Slow tech, small hulls are useful for war vessels because Mediums may take a bit of time. On higher tech speeds, I generally use Mediums as my main warships until I have the technological, industrial, economic and logistical capacity to skip over to Huge hulls, usually avoiding Large hulls altogether.

Despite the DA combat system, Small and Tiny hulls are still the most highly optimized ships for working with military starbases, since each individual ship gets the same set of bonuses, and because they're obviously the easiest to build and replace. Smalls also come useful as early-game anti-DreadLord interceptors which go around sniping their troop transports while you get your economy/industry/technology up and running.

Apart from that, Tiny/Small freighters require the least initial investment(and thus have the shortest break-even time), and Tiny/Small constructors are great for adding modules to existing starbases at minimal cost. On Very Slow tech with a lot of anomalies, I also make some small-hulled surveyors and let them run around until they gain a ton of hp, after which they become elite super-heavy fighters with more durability than newly-built Medium hulls. The small-hull tendency of gaining experience really quickly also helps these fighters' cause.

I usually use medium hulls because they justify the (usaully) expensive weapons I've teched up to. Small hulls just die to fast to justify spending 200 bc on, and by the time I get to that part of the game not using the very best weapons I have results in them getting vapourised before doing any amount of damage

I usually then use large and huge hulls in small numbers simply to act as bonus module carrying ships and counters to other enemy ships (Fuck you Lord Kona and your fleet of battleships)

I usually rely heavily on defences (most medium ships I build have more defence then attack) Because, althoughb vapourising things is nice, behing able to laugh at the AI while it's attacks bounce harmlessly off your ship is better.