I have tried a few and XYLON gets my vote. Paranoid Android is good too with the PIE controls but they have now been ported to XYLON too.
Both are the best I think as you can easily get rid of the nav and status bars and use the phone with its full 4.7 display using PIE controls instead of nav bars.
Paranoid is based on stock rom and XYLON has bits of the other roms that have been re written by devs like Cyanogen and AOKP etc.
Try those two for a start and take it from there.
To root first thing you need to do is unlock bootloader which wipes device. Best to do that first thing then it wont need to happen again unless you have to sell it factory fresh or send to repairs. Reversing it is easy also.
Look for nexus 4 toolkit in XDA.
Good luck.
Thanks.
My next question is when you install roms and I bet I will be trying a few to find the right one for me......do I loose all my data every time I install a custom rom?
Or do you just install the rom and all user/app data is there and you can use your phone like you did before installing the rom?
The phone will be rooted as soon as I do anything. I mean after That when I start messing about installing roms.