I set mine using the dial gauge but set the free play about half that specified. The secret is to tighten it too tight, then, as Dave says, spin the wheel a number of times. Without a dial gauge get it so there is no perceptible drag, but just barely perceptible movement on the rim of the tyre. Check for too tight by feeling the hub temperature after driving a few kilometres. 
I must be doing something right - at 490,000km still have all the original wheel bearings and drive flanges.
John
				
			 
			
		 
			
				
			
			
				John
JDNSW
1986 110 County 3.9 diesel
1970 2a 109 2.25 petrol
			
			
		 
	
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