I normally use a cartridge bearing wheelset but have some Shimano XT QR wheels i have stripped & regreased as the front was binding a bit.How much lateral play is ok with the cup and cone as it only spins smoothly with about 1mm of “slack”.The bearings are new and surfaces are A1.Do they need to have zero lateral axle movement before use….?

Yes, pretty much. I can get them with zero play very quickly if the cups and comes are smooth.
An axle vice (an insert for holding axles in a vice) makes the job a lot easier and more accurate though.

Ohh, check you’ve got the correct number and size of bearings in there… 9 each side, 1/4in bearings if I recall correctly.

With QR loose, a metric smidgen of play (an imperial smidgen is way too much). With that smidgen of play only just taken away by correctly tensioning the QR.

Best to loctite the least accessible cup and cone on each axle in the correct position, and only ever adjust the other side. Adjustment is a trial and error job over a cup of tea.

Adjusted as above, they are soooooooo smooth.

Edit: Grade 25 balls for XT, not the generic Grade 1000 they sell in cycle shops.

With the wheel out of the frame, leave a tiny bit of lateral play. When you tighten the QR in the frame/fork it will take out that play and you’re sorted. It’s hard to quantify how much play to leave in, you’ll need to try it and see. Never been quite sure why it works (maybe the pressure from the QR flexes the axle a little?) but it works. HTH

Edit – Tucker beat me to it!

(maybe the pressure from the QR flexes the axle a little?)

Unbelievably (until you’ve tried it), doing up the QR correctly compresses (shortens) the axle a tiny bit, but enough to change bearing preload.

Trial and error, first few times i did my shimano hubs it took a while, these days i can do a complete hub service in about 20 minutes. I find it helps to have just the tiniest amount of play in the axle still before you tighten the locking nut, then when the locking nut is done up the play goes, if you feel the axle binding then you can back off the locking nut a quarter turn or so and tighten the bottom nut onto the top nut i.e. undo it.

Just been in the garage doing this on my Shimano 105 Road Hub. Messed about for the last hour, so came in for a cuppa. Now I have the answer! Back out I go. Thanks.

Park tool website taught me how to do mine Useful