Mike raises a very good point regarding the owner's behavior during the time you have a lease-option. Refinancing the property is one risk. Going into foreclosure is another. Selling the property is another. All these things can (and do) happen, though not commonly.
I'm not a lawyer, so this isn't legal advice. However, there are other ways to protect yourself, though. First, to prevent (or at least have a good chance at preventing) a sale or a refinancing, you want to "cloud the title." You can do this by filing a "Memorandum of Agreement" with your local city or county. It doesn't have to spell out the terms and conditions of the lease-option; it simply puts the world on notice that another party--you--has an interest in the property. Usually (the technicalities vary from jurisdiction to jurisdiction) the memorandum is signed by both the optionor (owner) and optionee (buyer), notarized, and recorded. That'll cloud the title.
Second, to know whether the owner is making his/her mortgage payments on time, you want a document, often called an "Authorization to Release Information." That will allow you to contact the owner's lender(s); the owner requests the lender treat you in the same manner as they treat the borrower regarding release of information.
Regarding the "best method" of determining a contract price, keep in mind that at the end of the lease-option you'll be getting financing in your own name. Therefore, from a price standpoint, you want to make sure that the property will appraise for the agreed-upon price. In today's market--depending on where you are geographically and what your market is doing, as well as the length of the option--the contract price probably will be pretty close to today's fair market value. The owner will want it as high as possible, but it doesn't do the owner any good if it's set so high that the property won't appraise, and you're not able to buy.
And that leads to the inclusion of some additional protections for you in the option. Again, I'm not a lawyer, so this isn't legal advice. But you want one or more provisions in the option in case (1) the property won't appraise, or (2) you aren't able to buy. Regarding the property not appraising, the basic choices are: (1) the owner agrees to lower the sales price to the amount of the appraisal, or (2) the owner agrees to extend the option for an additional period of time (often 1 year). If it's the "owner's fault"--not really his fault, but a problem with the house not appraising--often the owner bears the cost...reducing the price or extending the option.
On the other hand, if you aren't able to close because, say, you don't have a sufficient downpayment or your credit isn't good enough, that's "your fault." The protections, in that case (if the owner agrees in the option upfront) might be to extend the option for an additional period (say 1 year), in return for an additional payment from you. You'd be paying for an option extension.
There's no "typical premium" or amount from the rent credited toward the option and, thus, the purchase. And it's all negotiable. However, very generally, an amount equal to about 20% of your payment is considered reasonably generous. I've seen less, and I've seen more. Often, the more you're paying each month, proportionately greater the amount credited. For example, just to use round numbers, if fair market rent were $1,000, you might pay $1,100 a month with $200 a month credited to the purchase price. If you paid $1,200, then $300 or $350 would be credited. And so on. Sometimes, sellers will want more in rental per month, but credit a greater percentage to the purchase price.
Hope that answers your questions. Post others as they occur to you.