Do we still have to do the redirects if we have this setup properly in webmaster tools? That is, under configuration --> settings --? preferred domain.
Second, in webmaster tools, should we always have the www and non-www setup so we can do the "change of address". For example, if www.mysite.com is my preferred URL, do I need to also make sure mysite.com is in webmaster tools and change the address to go to www.mysite.com?
My SOP is to make sure first that all non-canonical versions of the home page (the page with the most value, usually) are redirected, then make sure you set your preferred address in WMT, then add the rel=canonical tag to capture all the possible versions of the home page that you can't think of. As a side note I also noticed (the hard way) that Google treats capitalization in URIs the same way as these examples so www.Example.com is treated differently (at least for link value) than www.example.com. Basically if there is a single different character in the URI then it's considered a different URI.