Guitar Setup Guide
For DIY enthusiasts, at your own risk although this is all quite safe if you take your time and a little care.
1) Intonation
Intonation, is the easiest job. On an SG, Les Paul and others, at the bottom end of the guitar you should have a bridge where the strings go over "saddles" with little screws in them. Turn the screws, it makes the saddle move backwards and forwards which effectively makes the string longer or shorter (seeing as it affects the amount that is let to vibrate). Tune a string (important) then play the same string at the 12th fret. If the 12th note is higher than the tuned open string, make the string "longer" by moving the saddle back. Dont make the mistake of checking it again at this point as the open string will be out of tune. Retune it, play the open note, then the 12th. Adjust as required. If the 12th note is lower in tune than the open one, make the string shorter by doing the reverse of the above procedures. With the strings going out of tune on each intonation adjustment, in can take some time. But it'll last virtually forever, or until you use a different guage of strings. So do it once, and do it proper.
2) Neck setup
Myth : Guitar necks have to be straight.
Fact: strings vibrate in the same way as a taught rope would - i.e. it bounces more in the middle and less at the sides. If you have a neck thats straight as a die its going to bash the fretboard in the middle. Put a capo on your first fret (if you havent got one, buy one). With your right hand (if you're right handed) press down the highest fret on the low E string. What you're looking for now is to get a business card to fit snugly between the E string and the 7th fret. If its too tight you need to bend the neck up. If its roomy, the neck needs to be bent back.
3) Neck adjust
You need to get access to the truss rod end. On a Les Paul/SG this is usually underneath a screwed-down plate on the headstock. On some guitars it can be in the body as on my acoustic (inside the soundhole), and on some guitars with removable necks you have to unscrew the neck itself to get to it at the point where the neck joins the body.
There's a myth that by adjusting this the neck will immediately shatter - I think this is perpetuated by the above repair shops - it wont if you take your time. It will if you attach the truss road to your Black and Decker power drill and set it to full spin. So doing little turns (clockwise to bend back, anticlockwise to bend towards, but this CAN very so adjust a little and check) - tiny turns like 1/4 a revolution at a time. Keep checking with that business card, capo and finger on the 22nd/24th fret. Stop when it feels snug. Might still get a few rattles - next section.
3) Bridge setup
Nice and easy, adjust the screws either side of the bridge and the intonation saddles to acheive a hight where strings (particularly when fretted beteen 8-12th fret on the D/G strings) dont make any gargles. Keep raising it until you either dont get any rattling on fretted or open notes or until the rattling cant be heard on the amp, as is your preference. I personally go for a little acoustic rattle because it doesnt come through on the amp - just a tiny bit though.
4) Pickup height
Adjust the screws either side of the pickups till they're touching the strings. Then lower them until they dont magnetically pull the strings downwards (you'll either see it or it'll sound strange on a more subtle level). One of the pickups will be louder than the other - lower the loudest one to the level its the same volume as the quieter one. Then use the screws either side of the pickup to tip the balance so that you get an equal volume distribution over each string - you might have individual screws on the pickup under each string to make it easier.
Done.