That depends on which type of kit you're running. if you're running ball diff you want it a little loose on the front and a little tight on the back but not locked. If you have bevel diff use heavy weight silicone, i tried 300wt works fine with my TT01.
Ball bearings is a must. It will drift longer and batt life will run longer.

Locking the diff is not gonna do any good for drifting. you're just gonna slide everywhere and will cause understeer.

Set up for my TT01
0 camber all wheel if your running PVC or ABS.
soft spring front and back 30wt oil
19t motor and 3000 cell

check this http://www.geocities.com/dstylejr/minitt01.mpg
im also running Mini TT01 that i converted this myself just for fun.