I was wondering if the correct way to include an image\graphic in latex is A) crop ALL the white space around the figure and let LaTeX handle the borders/spacing completely; B) leave a white border in the graphic (if so, how much would be appropriate?).
I would say option A is the best way. The reason is that accurate alignment of the graphic then becomes simple. For example if you insert
In addition, it is possible that bitmap based images may not have pure white backgrounds (although image manipulation can fix this). In such cases your borders might be visible as a light grey tone around the graphic.