Margins and white space add a nice feel and a good visual image for your book. I usually recommend that you have about a one inch margin on all sides for letter-size books. Feel free to fudge on those margins with pictures and graphics where the information on the edges isn’t as important. You can enlarge a picture to fill the whole page with very small margins if the main subject of the picture is in the center. If your book is more than 500 pages and you are trying to reduce the number of pages (to keep it from being too heavy), then a 0.5 to 0.6 inch margin will work.
Depending on the binding you will lose a little of the page to the gutter (the inside margin of the binding edge). Most word processing programs allow you to compensate for this in page setup. Set your document for mirror margins for the whole document, and make the gutter 0.1 or 0.15, depending on the thickness of your book. This will shift the pages left (even pages) or right (odd pages) away from the gutter so it is easier to read.
You can also add a nice look to your book by moving the beginning of the chapters down on the page. Move the text a couple of inches down the page and it will stand out and be easier for the reader to find the beginning of the chapter. Test this out with a few different margins and spacing to see which you like best.