Originally Posted by BCRider

The top cap screw isn't set by a torque meter. Instead it is set by the feel of your steering. You tighten the top cap screw in small increments and in between hold the stem at the top cap and turn the steering. When it's just barely taken up the slack the steering will feel super easy to turn. As you tighten the top cap screw it'll get a little stiff. Tighten some more and it'll get more stiff. You're looking for the point where it goes from totaly free to just a little bit of resistance. WHen you find that point it's good. If you go too far it's too much.

Hint- despite what I just typed a good trick for a new headset installation is to over tighten at first so you can feel that it's more stiff than it should be. Rotate the forks a number of turns in each direction to bed in the headset components and then LOOSEN the top cap until you're down to just a slight noticable drag.

You'll only feel the correct drag from this preload when you're feeling it from the stem right at the steerer tube. It's a subtle thing and if you have any sort of leverage like with handlebars you won't feel the right setting.

As for tightening bicycle parts you can't go much wrong with the rules from the Park site.
http://www.parktool.com/repair/readhowto.asp?id=88

Note that in pretty much every case the smaller number in the range of torques they specify will be just fine. Going tighter will not aid anything at all if it's not required. Also when doing up parts with multiple screws such as stems and stem caps you need to tighten the screws in a back and forth or cross over manner so that the screws work up to the final even torque in small steps. If you try to tighten one screw to the final torque and then the other the parts will be overstressed in oddball ways and the end result could easily be a stripped out thread. Steel screw to alloy parts threads on your bicycle should always at least be oiled before threading in or better yet greased. This will avoid dissimilar metal corrosion and also make it less wearing on the alloy threads for parts that are tightened and loosened a lot. The lubrication also makes it easier to reach the final tension in the screw so again it's important to use no more than the lower level of torque unless you find the part is slipping or comes loose at some point. Things like stems, handlebars and seat post bolts should be done up evenly to the lower level or slightly lower and then test them by loading them hard in the manner you'll be using them when riding. If things don't slip then they are tight enough. If it does slip during the test or you find things like the seat post walks in the clamp while riding then tighten the screws a little more but not to the point you exceed the maximum torques given.