Others have provided suggestions on timing marks. I've used all of the methods mentioned at various times depending on the song and what I am trying to achieve.
Here is a couple of ways that I go about figuring out "what an effect to put in there." Sorry, this post is a bit longer than I wanted.
Step #1, as suggested by logandc99, is I spend some time looking at shared sequences under General >> Show Assets to get some ideas. Often, I will see some cool effects that I can just copy into a sequence. I also look at as many uploaded videos as I can find.
The easiest way to start a sequence is to create a bunch of effects. Select some cells, right click and select "Create Random Effects." You can do this for your entire display, but I find what works best for me is only to do this for my primary display element, usually my mega-tree. I then go through each effect, accept it as is, try to tweak it or often, delete and generate a new random effect. Once I have a bunch of these, I will typically reorder them so "match" the music better. For example, I would put a fast effect with a fast music segment.
I don't like a lot of switching between effects, so I try to create some continuity by setting up some variants of each effect that I then use for a few phrases, and occasionally a few beats. As an example, for a spiral, I may start with two colors, say red and green, then create a red and blue and blue and green variant. When place these in consecutive phrases or beats, the effect stays the same while the colors change. This simple technique can provide an almost infinite number of variants. I repeat this until I have part or all of the song sequenced. Look at my Carol of the Bells sequence
https://vimeo.com/82612008 to see examples of this technique -
http://nutcracker123.com/forum/index.php?topic=794.0 for the XML.
You can repeat the above for other for the other elements in your display., Often I just copy the effects directly - they look very different depending on the element, or I may just choose to use a solid color that matches the primary element. Using this approach, I can come up with a sequence very quickly.
One of the great features of Xlights is model groups. By using these, you can very simply create a very usable show in a very short time. Check out Auld Lang Syne
https://vimeo.com/149308700,
http://nutcracker123.com/forum/index.php?topic=2438.0 for the XML. It uses one model group for everything but the matrix, arches, lawn stakes and star bursts. With the new render style that was recently added to Xlights, I could now combine some of those elements together and further simplify the model.
If you are looking to do something a little bit more deliberate, I suggest that you spend a bit more time studying the shared sequences (or any of the many sequences on Youtube or Vimeo.) When I look at sequences, I try to understand what the author was seeking to do. Was it mainly keeping the beat? Showing off some cool effects? Creating some mood? Telling a story? Showcasing part of their display? Creating a sing-along? etc. I try to see how the sequence flows with the music: is there a discernable beginning, middle and end to the sequence? I also look at how colors are used, what are the primary colors and how are the complementary colors used.
What happens next is, of course, different for every song and every person. For me, it starts with the song. In some cases, I want to tell a story, so I try to come up with various effects that do that. The story can be an illustration of the words of the song., e.g., my Trim up the Tree sequence
https://vimeo.com/149112799 (pm me if you want to XML). Or it can be something more abstract, e.g., such as the Dance of the Sugar Plum Fairy Salmon
https://vimeo.com/56966182. The sky is the limit here, Logan Carpenter's Star Wars - Uptown Funk creation is one of the best I've seen so far - here's my adaptation
https://vimeo.com/149308700 (Logan's original sequence:
http://nutcracker123.com/forum/index.php?topic=2175.0) but there are many other videos, including Logan's original that have been upload.
This is not the be all, end all, but I hope it gives you some ideas of how to start. And once you do, don't forget to share so others can learn from you.