Bearing Adjustment

Wheel bearings should spin freely with very little or no drag. If you take the wheel off your bike and cannot easily spin the axle with your fingers, then the bearing is too tight. Adjustments require a special tool called a cone wrench (typically 13mm for front wheels, 15mm for rear). Using a cone wrench on both sides can quickly loosen a tight bearing. Putting an adjustable wrench on each outer locknut can quickly tighten a loose bearing (except for old hubs with keyed washers behind the locknuts, for these you use the cone wrench and an adjustable on the same side). Quick release axles should have a very tiny amount of play with the wheel off, since the skewer compresses the bearings.

Older 3 piece cranks: If your cranks are wobbly you may be able to tighten the bottom bracket bearings without removing the cranks. Loosen the lock ring on the left side of the bottom bracket, then carefully screw in the adjustable cup until the play is gone. Retighten the lock ring while holding the adjustable cup with a thin wrench.
If the cranks continue to loosen up, the right side cup is probably loose. To fix this remove both crank bolts, then the cranks arms with a crank arm puller (no, a hammer doesn’t work). Loosen the adjustable (left side) cup a lot first, then put a big wrench on the right side cup. For French or Italian frames turn clockwise. Most other frames are reverse threaded here, so turn counterclockwise to tighten. Use plenty of force. Finally screw the left side cup back in until play disappears, and secure the adjustment with the lock ring. Bolt the cranks back on again, using lots of force on the bolts. 

One piece cranks (old Schwinns, newer cheap bikes): The bearing is held tight by a nut on the left side. This is reverse threaded, so turn clockwise to loosen. Adjustments can be made to the bearing cone behind the lock nut and keyed washer, turn this counterclockwise to remove play. Tightening the lock nut will increase pressure on the bearings here, so make sure they do not feel rough after tightening.

Headset bearings: If your steering feels clunky there is probably play in the headset. On older bikes this is secured by a large nut on top of a large bearing cone. Loosen the top nut, and then screw in the bearing cone under the nut to remove play. Retighten the top nut while holding the bearing cone in place in order to lock in the adjustment. Make sure the handlebars still turn freely.

In general you want the ball bearings to spin freely. You don't want to feel play, nor excessive grittiness. Loose or tight bearings both wear out faster than properly adjusted ones.