Now this is really serious. There are some who say that a font size of 10 to 12 points would be good, some others who say that font sizes should be specified in percentage of 80 to 90% and some others who are against specifying font sizes. I wonder which one would be correct on the web usability point of view. Any help?

Using CSS we always specify using px.

There really is no right or wrong way. All browsers that I know of, recognize all font sizing elements.

So the right way, is whichever way is right for you.

Just to add....from the viewers point of view - if they really care that much about it they are just going to use their browser to override the font settings for the website anyways...so I would say its simply whatever looks best to you based on your site layout and how you like to write your code...