Here's my process...I've used this on my 12th scale diffs, TC Diffs and offroad diffs for years. They are always smooth.
1. Sand your diff rings
a. Get a flat surface (setup board, glass, etc).
b. Get some 800 grit Sandpaper
c. Sand in a circular fashion (I do both sides of the rings
2. Clean Everything with motor spray (diff rings, bearings, outdrives, balls)
3. Build the thrust bearing and install it into the outdrive (I use AE black grease)
4. Drop the diff gear onto the outdrive
5. Put a dab of diff lube on the palm of your hand, then put your balls in your hand (diff balls that is)
Roll the balls around your palm to coat them in lube.
6. Drop the balls one at a time into the diff gear.
7. Assemble the rest of the diff tightening slowly working the diff action as you tighten 1/4 to 1/2 turn at a time till it's adjusted properly.
8. Run it in then re-adjust.
I typically use:
AE Black grease for the thrust bearing
Trinity Royal oil in the diff bearings
AE Silicone lube on the diff balls
Ceramic Diff/Thrust balls but will use carbide if they come in the kit.