Building diffs are pretty easy once you get the hang of it, but it does take time to do it right. Things you need;
400-600 grit sand paper, red label associated silicone (stealth lube works too, black label, but the red stuff works better), black grease and new diff rings, thrust ball bearings and thrust ball rings.
First step; sand the diff rings in a figure 8, make sure you keep em flat while doing this. Once the shiny surface is gone and you can see all the scratches, you're good.
Step 2; assemble the thrust bearing, only thing to say about this is use plenty of black grease.
Step 3; if the spring is new, compress it with pliers.
Step 4; assemble the diff, use just enough silicone to fill the holes with, then push the diff balls in them and put a small, small drop of silicone on top of every ball.
Step 5; tighten the thrust bolt until the diffs come together, then work in the silicone, continue tightening and working in the silicone. Tighten as tight as you can without putting anything in the out drive to hold it.
Step 6; breaking in the diff, do this on a car stand, NOT on the track. Simply apply 1/4 to 1/3 throttle while car is on the stand and hold one of the tires for about 10 seconds, then start rotating that tire in reverse for about 10 seconds. Continue with all tires a few times, then tighten the thrust bolt and repeat.
Step 7; setting the diff tightness. This depends on your motor application, the hotter the motor, the tighter the diff (although when in doubt, tighter is better, you can adjust it later to be a little looser). But this is a good start;
Originally Posted by Govert
Install it in your car and check diff slippage by blocking the spur and one rear wheel. For instance: Block the left rear tire with your left hand. At the same time, block your spur gear with the same hand. Now gently try to turn your right rear wheel with your right hand. If you can actually feel it will turn, stop and tighten your diff a little bit untill your diff won't be able to slip.
The only things I will say here, is that only with hot motors does the tire need not slip at all, and while doing this make sure your slipper is all but locked.
Step 8; setting the slipper, this is of course a preference unique to most racers, but one thing should be noted above all else: the slipper should slip before the diffs ever think about barking. Using the same method as above, loosen the slipper until you are sure it is slipping and the diff isn't. Set slipper to your preference after that, but no tighter, if slipper is too loose then you need to tighten the diffs before tightening up the slipper.
This is the info that was given to me by a Losi driver at a regional event last year, since I started using this method my diffs have been noticeably smoother and last longer. I use this method for both on (no slipper though) and off road cars, and rebuild my diffs every 2 months. And that is only because I am obsessed with working on my cars. One thing to note, when building diffs this way, they will feel a little scratchy, this is the diff balls actually rolling across the diff rings that hand sand paper applied to them, the purpose of the sand papered rings is to get better grip on the diff balls to make them not slip as easily allowing for a slightly looser diff, also this is why the red label associated silicone is better than the stealth lube.