Headsets will thank you for regular servicing. Pick up the bike by the handlebar, and twist it – the bar should move freely, with no crunching noises.
Check before you start that it’s not too late for a service – leave it too long and you have to replace your headset. Replacement is a job that needs expensive and special tools, so it is worth getting your bike shop to do it for you. Turn your bars gently from one side to the other. If the headset is pitted, you will feel a notch as the headset passes through the ’straight ahead’ position – almost as if the headset is indexed. If this happens, it’s new headset time. Otherwise, it’s worth trying to service. Release the front brakes, and free the cable from the front brake lever so that it hangs free. Take the front wheel off (you take the forks out in a while, and the wheel makes them heavy and unwieldy). Remove the stem – loosen the expander bolt on the top of the stem four turns, then knock the head of the bolt gently with a block of wood or a rubber mallet. Pull the stem up and out of the steerer tube, and tie or tape it to the top tube to keep it out of the way. Now you’re ready to service the headset.
Step 1: Remove the top nut. It is wedged tightly against the lower nut, so you need two spanners of the right size: one to hold the adjusting nut still, one to loosen the top nut. Slide off any washers. Lay out everything you take off in order so you know how to put them back together.
Step 2: Hold the fork still and undo the adjusting nut. When you’ve removed it, you should find that you can slide the forks out from the bottom of the frame. Make sure you catch any bearings or seals that come off, and note which direction they were facing in. Be particularly careful with bearing races – they must go back together in the correct order.
Step 3: Clean cups, bearings and seals carefully. To remove compacted grease and mud, scrub them with an old toothbrush and some degreaser. Rinse and dry afterwards. Inspect the bearing surfaces carefully. Any kind of pitting means replacing the headset, a bike shop job. Pay particular attention to the crown race, the part that usually suffers first. If the bearings are dirty, replace them – fresh bearings make your headset last longer. Make sure you get the correct size.
Step 4: Grease the cups at either end of the head tube. There should be enough grease to cover the bearings up to their middles. Cartridge bearings are the exception: you do not need to grease the cups. Grease the threads on the adjusting and top nuts, and dab a little on the bottom surface of the top cup.
Step 5: Pop bearings and then seals into the cups, paying attention to the direction of the bearings. Slide the fork up through the frame and trap it in place by threading on the adjusting cup. Make sure it’s flat as it goes on – it’s easy to cross-thread by mistake. Tighten until the fork doesn’t rattle around in the frame – no tighter for now.
Step 6: Replace any washers. If the fork has a slot cut down through the thread, orientate any washers with a tab so that the tab fits in the slot. Fit the top nut and tighten it down until it touches the adjusting nut. Grease the inside of the steerer tube and replace the stem. Check that it points straight forward and that the safety mark is inside the frame. Tighten the Allen key bolt at the top of the stem firmly. Replace front wheel and front brake, then adjust bearings
Source : BIKE MAINTENANCE TIPS, TRICKS & TECHNIQUES
See also bike maintenance tips, tricks and techniques “Threaded headsets: adjusting bearings”