In the picture below, the thing on the right is the star nut:



The way it works is it gets pushed into the steer tube an inch or so past the top. The cap and screw then get mounted on top of the stem and the screw is tightened just enough to compress the bearings so there's no play in the headset and the bars are able to turn freely. After this the stem is tightened onto the steer tube.

Here is the star nut down in the tube (I used a small ball peen hammer to tap it into there):



The cap & screw are mounted & tightened and the stem is tightened after that:



Here it is all put together....



I used carbon spacers because I'm really worried about weight...lol not really it's just all I had. Anyway, one of those spacers will eventually be replaced with a brake cable hanger.

And of course the garage door shot of the current progress:



I had also installed my Cane Creek brake levers. I will be using the Nashbar cantilever brakes for stopping.

All in all a good day - I was able to saddle up and ride a bit and it really felt nice. A bit more upright than my other rides and really smooth.

Time to regroup and plan what happens next.

Have a great Thanksgiving!