Cain - When racing stock, you typically want your diffs to be as free as possible without slipping at all. So in the rear, a looser diff usually lets your car rotate quicker on tighter corners. Tighter diffs (not too tight) will make your car fell more stable or smooth.
As far as the yellow belt. All you have to do is put it in the car and race it. It is much freer than the blue belt is right out of the package. In my opinion, don't bother trying to cut a belt. It's too risky and not noticeable in performance. You can set the tension fairly loose with less chance of skipping as well.
About your bearings. Try taking all the bearings out of the car. Fill a small glass jar or cup with about .5 to 1' of motorspray and drop all the bearings in there. Let em soak for an hour or two. Then take each one out. Now blast the bearing right at the seem between the seal and the inner race. Spin the bearing on your finger and keep doing it. It will make some noise, and gradually should get smoother in about 30 seconds of spinning it if its not damaged. Once it spins real free dry, take one to two small drops of a very thin bearing oil like Trinity Royal Oil. And spin on finger for another 30 seconds. If you can't wait a couple of hours. You can try to pop the seals off one side of each bearing and just blast em with spray and spin. Repeat until the bearing is free. Then same oiling technique.