I recently bought a late 80's Centurion off of eBay, and have been overhauling it in my spare time. After stripping the frame and applying frame saver, I just repacked the headset. It's a 105 threaded version with cage bearings. Pretty standard design for the time, relatively light with steel bearing races. The races themselves are smooth, not pitted at all, and the bearings look to be in fine shape - not perfectly smooth, but close with few scratches. The bearings are in retainers, and there's not any bearings missing.
After I packed the headset with grease and began adjusting it, I found that there was no happy medium between "loose with play" and "tight so won't turn easily". If it's tightened so that the fork turns comfortably, there's a fair bit of play when I hold the fork tips and alternately pull and push them with respect to the main frame. If I tighten the headset enough so that there's no play - and I can barely get it this far - then the fork doesn't turn easily. Though, in this state the fork still turns smoothly - the resistance is constant - but there's a fair bit of resistance.
Now, I don't think that the amount of resistance will make steering difficult, and riding no-handed should still be fine. However, I'm worried that
(a) the headset might be too tight, which will cause it to pit and wear out
(b) or perhaps the bearings are worn down and aren't wide enough to properly fill the open space betwen the male and female bearing races, thus resulting in the play
So, does any of this sound problematic? I've got a fair bit of mechanical experience, but haven't worked in a shop in 10 years and haven't had this issue with threaded headsets in recent experience. I overhauled the LX headset on my good bike this summer - it has cartridge bearings and I can get it adjusted so that there is no play and the fork spins 10 rotations with a good flick of the wrist. But it's a very different (and more expensive) design.