As usual it's a mecanical thread so I'll have to chime in on preload as an aspect of proper adjustment. Preload is the process of making the hub "too tight" with the though of it "breaking in." I've done quite a few experiments with this because I'm really of two minds about it. I don't like it but it works without hurting the hub if done correctly. It takes a lot of experience to judge the preload needed for a hub, so for your personal bike use the "no play" model of adjustment.
On to the question at large. cup and cone bearings are "never" perfect from the factory and this is where preload comes into play. By preloading the bearings you create a more "perfect" bearing run over time. Preloading can also smooth out light brinelling if done correctly. Too loose bearings can damage a hub just aas badlly as too tight. While at a shop in Seattle that was a huge Raleigh dealer we created a little experiment in preload on new bikes. one day we'd adjust the hubs to just right, the next we use preload and we'd mark this on the build tags. When the bikes came back for their 30-day tune up we'd check the build tag and 100% of the hubs adjusted "just right" were loose, except on the absolute top of the line parts. On the hubs with preload we'd adjust them to "just right" and see how they felt after the breakin period, 95% of the time it was "perfect." In about 5% of the time it wouldn't feel "just right" so we'd overhaul the hub and have a look. Usually it would show slight brinnelling, and with these we'd rebuild them with new grade 25 bearings and ask the customer to bring the bike back for a "90-day tune." Every time at the 90-day the hub was fine. This was a totally non-scientific trial but it showed me the benifit of pre-load if done correctly. The only rules to preload are the cheaper the hub the more the preload, and each hub is an individual. I don't recommend using preload unless you are really comfortable with adjusting hubs and preload should only be used in the case of new hubs or tring to correct slight brinnelling. Many of the engineers on the list will hate what I just said about preload, but I say just try it before you knock it and your results may vary.
enjoy, Brandon"monkeyman"Ives
"Nobody can do everything, but if everybody did something everything would get done." Gil Scott-Heron