yeah, our machine does atleast .003" (better from what our mentor tells me). We are trying out a waterjet from our sponsors for the first time. They list the tolerance as .005" on their website but my mentor assures me that they can do much better than .003". I made my previous designs for .002" of backlash but it is no big deal to change.
Ok, I will look into flanged bearings. They certainly would make life a lot easier. (Come to think of it, I have half the bearings I need from a toughbox I [slash]demolished[/slash] err... modified

)
thanks, Vivek