I basically do it by eye.
I cut it in a "T" shape. Thick on top to create a plug effect and the vertical bottom I cut narrow for wicking which leaves room in the cartridge so it holds more juice. Seems to get more mileage out of a 510 cartridge with this filler and cut. Also use it on my eGo Mega Carts.
Make sure you keep the foam wet, don't let it dry out or any type of filler would burn if it drys out. Yeah, the blue foam tastes nasty when it burns. It's cheap enough to discard it after it burns and replace it with a new piece instead of washing it out. Also, push down the filler so it a little below the end of the cart.
Update:
Over the course of time I have found that the consistency of the eLiquid has a lot to do with how tight / how thick you should cut your foam.
I have found that if you are using a lot of VG that you should NOT make it to wide on top to allow the thicker VG base liquid to seep through.
See:
Blue Foam