As I'm sure everyone knows there is no right way and no wrong way. Some people and some shows can probably call great with just a stop watch, other can be great with just hearing the music, others just knowing the dance. The trick is always what works best for you and for that particular show.
Now with that said I'l tell you what has worked best for me and the various dance shows I have done. This is for dance concerts where there are multiple pieces that have no relation to each other.
My cue sheet is laid out in a few columns:
1: Time (when the cue takes place from start)
2: Flys
3: Sound
4: Spots
5: Lights
6: Stage action (what the dancer does that tells me to call the cue)
(ie. "dancers move to form upstage line)
7: Cue action (what is happening as a result of the cue ie. "Jess's solo light"
I laid it out this way since i use a combination of the stop watch and stage action to call the cues. Looking down the far left hand column (#1) i see that at 0:55 there a cue, following that line over i can see that columns 2,3,4 are empty so there are no fly, sound, or spots and notice that Lx 45 happens. Looking in the stage action column i see it happens "with the music accent starting Jess's solo," and from rehearsal i know jess steps out of the line for her solo. Then cue action tells me that her solo light comes up. Trial and error led me to lay them out this way as in dance it is often lights that has the most cues so i wanted its numbers next to the stage action and then usually sound started at the start of the piece and ended at the end same with flys (typically just the main curtain) it could be farther away. So when I follow my cuesheet I see the approximate time the cue is suppose to happen (cause face it i can start my watch when i say go but my sound ops finger could slip and then the music doesnt start for say another 2 seconds which really throws things off). So then as time approaches the various cue times (typically within 20secs) i give the standby and then watch or listen to the stage action for the point the cue happens. Never had a problem. Even when designers would just give me times either during tech or during a paper tech if we have a rehearsal on video (very useful if you can manage to record a run before tech to reference on your own) i can be like " ok so you want it when so and so does this" and they go like exactly.
I also highly feel there is a real art in it as well. You really need to know the music and the dances just as much as the dancers. At least twice in every dance show I have done (and some straight plays as well) during a tech run I will be calling the show and feel so focused and connected to everything going on that i'd be listening to the music, following the action on stage, knowing a light cue is coming up, feel that point and call the cue. End of the piece comes LD turns to me and is like "oh so you know you called 57 to early.....But I really like it so we're gonna keep it and now add 57.5 where 57 was originally suppose to go which is when this happens." And thats why the lighting designers loved working with me on dance because they know I possessed that sense to be able to feel when the piece (music and choreography) calls for that light change (granted ill admit i dont know how things should change to make it look pretty on stage, but you can definately feel certain points are calling for some kind of change.)
And I know this last bit is a bit off topic but it seems a good place to add it in, because it is one of those things that really pissed the hell out of me about my theatre department in collge. Do not treat a dance show like a play. I know it sounds really simple but I saw so many conflicts between the dance department and the tech area of my college cause all the tech people tried treating the dance shows the same way they treated a play. In production meetings, in techs, in overall production. They are completely different beasts and need to be treated as such. In college I was very much liked on the dance shows and the dance faculty and choreographers to this day keep saying they wish i was still there and keep telling me to come back and save them. And when others i still know in college there get ready to stage manage one of the dance shows I'm always like "take mostly everything you know about stage managing a play, and push it aside. Don't think you know what to do cause you did a couple plays. Go in not knowing what you are doing, and take the challenges as they come. Just cause you do that thing for a play does not mean you should force it to work here, cause face it some of the choreographers have a set way of how their dance shows work and the tech people in this department dont want to conceed to that cause that would make it seem like they are wrong in the way they do things. And you know none of them can be wrong."
Anyway if you want to see a sample of my cue sheets let me know and I can email a copy and answer more questions if they arise.