When I am printing 8x12 and smaller sizes should I down rez my photos to 360dpi instead of something like 480?
Downsampling, if you have enough "native" resolution in the image is never a great idea...why waste pixels you already have simply to meet some sort of magic number? (clue, there is no reason).
Fact is that you actually NEED more resolution (in pixels/unit) with small prints held closer to your eyes than larger prints whose intended viewing distance is further away.
So, my experience is to simply resize without resampling (don't change the pixel count) and after resizing, output sharpen for the actual PPI.
As for whether or not to upsample (before output sharpening) that's a slight;y more difficult question to answer...it all depends on your image and printer. Generally speaking, upsampling and then output sharpening will result in a better final output if your image has a lot of high frequency image data or high contrast diagonal or circular objects. I can't really give you a "this is always true" answer other than to test it yourself on YOUR images and YOUR printer.
Also, I don't know what the heck "ImageNest" is...my experience is with Photoshop and Lightroom. I pretty much tend to print from Lightroom because, well, that's my preference...