I would like to use the DRV8825 in micro-stepping mode with an Adafruit NEMA 17 bipolar stepper motor. Adafruit specs the motor for 35 ohms per winding, 350 mA/winding max at 12V. I have measured the current for one winding using a hall-effect ammeter to be 295 mA at 12V in single-step mode with no stepping taking place, which is fairly close to the 0.7*Imax value you described (0.7 * 0.35 = 0.245).
I currently have the current limit set for .5V at VREF (1.0 Amp?), but after reading the Max. Step Frequency for #1206 Stepper?, it appears that to use micro-stepping I need to set the current limit to something lower. However, it wasn’t quite clear to me what that lower value should be. Should I set it to 0.245A (i.e. 0.122V at VREF) or something else?