This section presents the set up process. This usually involves adjusting the string height (action) and intonation, ensuring there is no fret buzz, adjusting pickup height if necessary and overall fine tuning the playability of the guitar. In most cases standard specs are used for items such as string height and distance between the strings and pickups. After the initial "to-spec" set-up changes can be made to adjust facets of the set-up to the players preferences.
Intonation: is the guitar's ability to get in tune and stay in tune over the length of the neck. From all that I have read, at its most basic point, correct intonation can be achieved by setting up the guitar so the note at the 12th fret (octave) equals the note of the open string. Most novice players end their tuning task at ensuring all of the open strings are in tune. Depending on the quality and set-up of the guitar one might tune all open strings and realize as notes are played higher up the neck that they are sharp or flat. This is where intonation comes into play.
In most cases the intonation is adjusted at the bridge. Fundamentally I it involves either lengthening or shortening the string length. This is (most often) done by adjusting the saddles at bridge. If the note at the 12th fret is sharp you need to lengthen the string; if it is flat you need to shorten the string.
More information on Guitar Intonation and Set-Up can be found at:
You could also Google guitar intonation and find a bevy of articles on the Internet.
