undo_retention should be set longer than your longest open cursor. That's probably your longest running job/sql/plsql block.

Make the undo tablespace autoincrement, so you don't have to rerun your longest job when you get there.

If you have one huge job and everything else is small you'll have to keep one big undo tablespace. This is my preference since disks (even the real fast ones) are relatively cheap.

If you want to recover the space;
1) create a new undo tablespace
2) "alter system set undo_tablespace the_new_tablespace"
3) drop the old (don't worry, it won't drop till all the transactions are committed).