If you often ride your bike, you’d better overhaul your headset at least once a year to check for wear and to make sure everything is in good condition.
For this part, you'll need some waterproof grease, an old toothbrush and some cleaning solvent. If you have an older 1" headset, you'll need a set of 32mm spanner wrenches. Larger 1 1/8" headsets usually require a set of 36mm spanner wrenches.
Installing and Maintaining Headsets
Installing headsets is easy, but it does require some costly tools. So my suggestion is to pay the local bike mechanic to do it for you. It's only 10 or 15 minutes of work so it shouldn't cost much. For those of you who really want to do it yourselves, I'll simply point you to the Park Tools' excellent instructions.
That Park Tools article also explains how to disassemble the headset to grease or replace bearings, something that should be done a couple of times a year with loose ball headsets. It's an easy at-home job requiring only a headset wrench and some grease.
Loose Ball or Sealed Bearing
I am completely sold on sealed cartridge bearing headsets and they are the only type I will now install on my own bikes. The advantage of sealed bearings is that they last much longer, are smoother, are sealed against moisture, and require no maintenance. With the Grand Cru headset, which I use, the crown race is split so no tools are required to install or remove it. And if the bearings do someday wear out you simply lift out the two bearing cartridges and drop in new ones. (Note that some sealed bearing headsets have pressed in bearings and traditional crown races.)
This is not to say that loose ball headsets are bad. Cyclists have been using them for over a hundred years. If you ride mostly in nice weather and don't mind a bit of maintenance, they are a good way to save some money.
Roller bearing headsets also had a strong following, particularly the now discontinued Stronglight A9 headset. But with modern sealed bearing headsets available for the same price, I can see no reason to use a roller bearing headset. Some claim that roller bearing headsets reduce shimmy, but so do seal bearing headsets.
Now loosen and remove the locknut. Holding the fork in place with one hand, remove any spacers and unthread the adjusting race. Make sure to note how many spacers there are, and what order they came off. Gently slide the fork down and out of the frame. Make sure to make a note of which way the bearing races are facing before you remove them.
Wipe clean all of the bearing races located on both the frame and fork as well as the upper threaded race. Inspect all four of the bearing races to make sure they are not grooved or pitted. If so you will likely have to replace the entire headset unit.
Thou roughly clean the ball bearing cages with your toothbrush and solvent. Then wipe them dry with a clean rag, and set them aside to air-dry. Inspect the ball cages to make sure they aren't bent or worn. You can replace the cages without replacing the entire headset, but you'll have to bring the old set to your local bike shop for proper sizing.
Stack height is the total height, or thickness, of the headset, not including the parts that fit into the head tube. In other words, it's the vertical distance required to fit the headset. Stack height is important because if it's greater than the available space on the fork the headset will not fit. This is rarely an issue on modern frames, but older frames often had their steerer tube lengths sized for a low-stack-height steel headset, so taller modern headsets might not fit. It pays to measure first. On a fork that has extra length, spacers are added to take up the excess.
If you're fitting a headset but find you lack just a millimeter or two of room, simply remove the lock washer and use a drop of Locktite on the top nut instead.
Once the bearings are in place and fully greased, carefully slide the fork back into the frame and finger-tighten the adjusting race. Wipe off any excess grease that may have squirted out the sides. Slide the spacers back on and thread the locknut on finger tight.
To adjust the headset, hold the lower adjusting race with a spanner wrench and use a second spanner to tighten locknut against the adjusting race.
To test the adjustment, check that the headset turns freely and check for play by rocking the fork back and forth in the frame. Re-adjust as needed until the bars spin freely and have no play.