It really depends on how high you want to go and what you plan on using the truck for after you lift it. 4.5-6" is about the practical limit if you tow a 5th wheel. Then you have to weigh cost vs. quality, and that's where it gets tricky. There are a ton of kits and everybody has a different opinion, but basically if you look at Carli, Icon, and Rize, you're looking at around $2k for a 4.5-6" lift that will have good ride characteristics and you'll be happy with. There are a bunch of cheaper kits around too, but they generally don't fit as well or don't include everything you need, and the ride quality is quite often no better than stock or worse.
Having the older Donahoe Racing version of what is now the Icon 4.5" kit for our trucks, I'm maybe a little partial, but I've never heard a complaint about the ride quality or the kit, and I have no complaints either. I go off road with it, and I tow my 5th wheel with it, and the kit rides better than stock under all circumstances.
Once you decide on how high you want to go, pick a couple kits in your price range and ask for opinions from people who actually own those kits. Also, look at the signatures and make sure the guys responding have '05-07 trucks, the older trucks are leaf springs up front and the newer trucks have a revised rear suspension, so there are secondary differences that can affect things like ride quality in a big way.
The Current Truck (Oct-2013 to Present):
1999 (Early) F-350 Lariat, CCLB, SRW, Black/Tan
7.3L Powerstroke, 4R100, 4x4, 3.73, 37x13.50-18s, '05 Axle Swap, 6" Fabtech lift, GTP38 "D66" turbo upgrade, SCT 4-position chip with custom tuning by me, Straight Piped 4" down pipe through 5" dual stacks, N-Fab full length triple steps, Pro-Tech cab guard and tool box, louvered 5th wheel gate, Hella 500 Fog and Driving lamps, much more to come...
The one I'll miss, (Mar-2009 to Jan-2014):
2000 Excursion XLT 4x4
6.8L V-10, 4R100, 4.30, 285/75-18, 271whp / 388wtq
The one I won't, (Jul-2005 to Sep-2012):
2005 F-350 XLT, CCLB, SRW, 4x4 FX4
6.0L PSD, ZF-6S650, 3.73, 35x12.5-18, 4.5" Lift