I'm a believer of the "go with your gut" school.  I've said "it's ok" at times, other times I've said "I know".  The main thing seems to be repetition of short soothing phrases.

When I'm crying, my husband generally tells me "Let it out.  Let it out."  He knows I'm a reluctant cryer and it's his way of saying it's not just ok for me to cry, it's probably necessary at that moment.

If my wife is crying I'll say something like "I've got you" and hug her tight if she is sobbing. I she is trying to talk while crying I don't say anything to give her a chance to get the words out - I'll sometimes wipe her tears gently from her face. I've also said "it ok" and "it alright" when she has broken down completely in tears.

For people I'm not as intimate with I've said things like "it ok, tears are allowed" or "don't be embarrased, it's fine" if they start saying sorry for getting emotional.

I'm with PaperThings on this one, I usually say shh, shh its ok and give hugs.

I like "it's okay" but I like to make sure the person knows I mean "it's okay to cry," not "it [the situation] is okay, you don't have to cry," which can be invalidating.

It kind of depends on the person and the situation.  Once, I was comforting a male friend of mine, and I just held him and said, "It's okay, it's okay," very softly.  On the other hand, I know my boyfriend would take that to mean the situation was okay and feel invalidated, so I would never say that to him unless the context somehow set it up.  Once, the first time my bf cried to me over the phone, he was apologizing a bunch.  I said, "It's okay,"  but after the exchange was repeated a couple of times, I realized he wasn't taking it to heart, so I expanded my response by telling him he needed to get out his stress and he had nothing to apologize for.  He hasn't apologized for crying to me since.  After that, I've pretty much abandoned the short, stereotypical phrases with him and pretty much just continue to talk to him seriously about the issue through his crying, sometimes reassuring him of how much I love him.  Of course, I never really get to hold him while he's crying; he's usually either on the phone or, if in person, holding back.  When the opportunity finally arises, I'll probably tell him I love him and, if it's true in the situation, that everything will be okay.  I'd love to also say something like, "I've got you" or "Let it out," but for some reason I'm more nervous about those sorts of things, as if focusing in on his crying itself rather than the problem behind it could indicate that I have some sort of weird interest in it or something.