Once you put the stem on and get your spacers and steerer tube length as you like them, you tighten the top cap screw to set the preload. Setting the preload means you remove the play by tightening the screw (with the stem bolts not tightened), but leave it loose enouggh for the bike to steer freely without binding.

Honestly, you may be in over your head, from the sound of it. That's a very nice frame, fork, and a very expensive headset. Congratulations on such a nice find. A trip to your LBS and they will fix you up for not a lot of money and it will be done right. I bet they wouldn't mind explaining to you in person how all this works. Once you've seen it and understand it, it's no biggie.