Stranded stainless steel wire doesn't oxidize like the copper does, and in this respect is just as conductive ... the fine stranded is very flexible (a good thing inside a guitar), gauge wise that's open to interpretation, something around 22 if you can get away with heavier wire then great, I try to get something that works good with the smaller solder lugs and pcb ... generally PVC insulated or such. Also good for solder rework, removes clean, and cleans up nicely. Of course the truth is that just about anything will work in a guitar.
I like the pre-bonded wire from www.smallbearelectronics.com. I have a couple spools of it, and I use it for most of my guitar wiring needs. It's very flexible, which is nice when you start to feel like you need three hands to hold solder, the iron, and the wire to the back of a pot. I also have some smaller gauge wire that I got from www.guitarelectronics.com, which I use to wire up short, intricate connections on push/pull pots.
for less precise wirings, like from a pot to an output jack or something like that, i use 22 gauge insulated wire, nothin special. For wiring push/pulls and wiring where its very exact, i use 26 gauge insulated, works great. For my shieldied wires i use this cloth covered wire which is surrounded by the shielding, i prefer this over the shielding wire with normal insulation because the insulation may accidentally melt and make the shield touch the inner lead. i get all my wire from Guitar Electronics , great quality and decent prices