what ammo/grains works best?  is it limited to 55gr and lighter?

I have a Colt Sporter in 7.62x39 with a 1 in 12 twist.  Wolf 122gr HP has been working fine an is more accurate than the heaver Silver Bear rounds that I was using.

oops, this is in .223...what would the max range be as well?

Yep, you are pretty much limited to 55 gr or less. If I wanted a good general purpose round, M193 spec ammo (Federal XM193 and Winchester Q3131A) are about your best bets. If you need a SP, go with the Federal 55 gr Trophy Bonded. These are about all I would recommend in that weight range for self defense purposes. Most of the other 55 gr and under SP's and HP's sometimes don't penetrate sufficiently. But if your only interest is varmints or paper punching, just get something that shoots well and is cheap, but of decent quality.

-Charging Handle

yep, this is for a paper/varmint punncher.
thanks...