Don't get ahead of yourself.
This is a 3 step process, and must be done in order or you are wasting your time.
1) "Level" the ways.
2) Align the headstock.
3) Align the tail stock.
If the ways are not in the same plane, then aligning the headstock is a waste of time. There are many good methods detailed here, I only suggest you really fuss over this because any error in the leveling will affect the alignment of the headstock.
If you can assume the x-slide is truly square to the ways, you can align the headstock with a facing cut and checking for dish/crown. If you have an older Taiwan machine, this is not a safe assumption. Taiwan in the 80's and 90's was what China is today for quality.
Best thing is a test bar that fits into the taper, worst thing is the "Rollie Dad" method.
I use a piece of 3" diameter aluminum tube about 12" long in an 8" 4 jaw chuck for my 13x40 lathe. Use a shorter tube for a 3jaw or a smaller 4jaw.
Be very mindful of tool pressure. If you are using insert tooling, use a shorter tube (3x diameter?). The ideal tool is a HSS shearing tool, but I just use a razor sharp tool with almost no radius (the bigger the radius, the more the tool pressure), and lots of negative lead angle. The goal is to direct all the cutting force at the chuck.
You can easily convince yourself that sag is not an issue with this setup using an online calculator for beam deflection. This tube weighs ~2.5lbs, a 24"x3"x.25" tube deflects ~0.0004" with 5lbs of force in the middle. So a 12" cantilevered tube only supporting it's own weight will deflect substantially less (and sag has minimal effect of the diameter when the tool is presented from the side).
Measure the diameter at either end, then rotate the headstock a bit. I use two indicators on the tube, and rotate the headstock enough to eliminate about 2/3 of the difference between the readings. For instance, if the unsupported end is 0.012" bigger, zero an indicator at both ends, and rotate the head stock so the difference is about 0.004" and cut it again. Always make two cuts, the first cut puts both ends at the same approximate diameter so the second cut takes the same amount of material off both ends (this is really important).
Once the head stock is aligned, then align the tail stock. I favor the "2 ring" method, but other methods are equally as good.
once all done, you should make a large facing cut to see if your cross slide is cutting perpendicular.
For what it is worth, my PM1340GT measured 0.0003" out of the box, compared to my old Chinese lathe that measured 0.028".
