Here's the settings I used. (R) means required for a stable age and (O) means optional. "Clear modifiers" is currently only required due to a bug in Mystcraft, so it might not be required in the next update.
Skylands Pages:
(R) Standard terrain
(R) Native Biome Controller
(O) No seas
(R) Standard Lighting
(R) Normal Weather
(O) East
(O) Rising
(O) Full Length
(R) Normal Sun
(O) East
(O) Setting
(O) Full Length
(R) Normal Moon
(R) Normal Stars
(O) Skylands
(O) Star Fissure
(O) Boundless sky
(O) Villages
(R) Clear modifiers
This creates a Skylands that uses overworld style biomes. Because of the floating islands, you may prefer to use "Small Biomes" or "Tiny Biomes" instead of "Native Biome Controller", but then you need to specify at least three biomes to use ("Native Biome Controller" requires no biomes and just uses the default list). No seas does exactly what is says on the tin, and helps prevent "lake" islands. I chose Standard Lighting and Normal Weather as I wanted it to be like the overworld, but in the sky. Same for the East Rising Full Length Normal Sun and East Setting Full Length Normal Moon, this ensures the sun and moon behave as they do in the overworld. If you don't put all those pages in for the sun and moon, you can end up with a sun during the "night" or with them both going round at the same time etc. You could always set this to a Noon Zero Length Normal Sun if you want perma-day, or just "Dark sun" if you want perma-night. Skylands is actually an optional symbol for a stable age, but it's required if you actually want it to be Skylands
I throw a star fissure in there in case a creeper takes out the linking book. Boundless sky removes the horizon effect from the skybox so you don't have a line where the land used to be. Villages is up to you, they do look a bit odd with cobble towers going down into the abyss.
Cave Age Pages:
(R) Cave World
(R) Single Biome
(R) Extreme Hills Biome
(O) No seas
(O) Mineshafts
(O) Caves x3
(O) Ravines x3
(O) Strongholds
(O) Dungeons
(R) No Weather
(R) Dark
(R) Dark Moon
(R) Dark Sun
(R) Ender Starfield
(O) Black
(O) Cloud Color
(O) Scorched Surface x6
(R) Clear Modifiers
With this one you don't need to make it single biome, you could use the "Native Biome Controller", I just preferred a single biome for consistency. The "No seas" page is more important here, although it does not remove all water, it does lower the water level from y64 to about y34, making the caverns more spacious. I throw in some Mineshafts, Strongholds and Dungeons (all optional). Caves is also not needed (without it you will still get huge caverns), the caves symbol just carves out some cave tunnels in addition to the huge caverns. The cave symbol stacks for different cave layouts, so I threw three in there. I'm not sure if Ravines stacks like caves does, but I threw three in there too and didn't get any ill effects. I set "No weather" because there's no point in having weather or rain if everyone's below the surface. "Dark" is an alternative to "Standard Lighting" and adds to the atmosphere of the cave world, but you might prefer "Standard Lighting" or "Bright" (note "Bright" looks fully lit, but does not prevent mob spawning - you'd need "Single Biome", "Mooshroom Island Biome" to prevent mobs). I set a Dark Moon and Dark Sun to hide the moon and sun as it would look weird to have a sun and moon passing by in the distance whilst underground. I set Ender Starfield just to add to the dark effect, but you could also just use the "Normal Stars" instead. Black clouds just hides the clouds (again no need for them). Then lastly, as Mystcraft cave worlds still have a surface (unfortunately), I set six scorched surface pages to ensure that anyone trying to sneak out onto the surface is suitably punished
(Quantum armour keeps them alive for a few minutes, but it's still reasonable damage - you could always set more scorched surface pages).
