Here some video of my leveling the bed using the dial indicator. I have also posted the mount to Thingiverse – http://www.thingiverse.com/thing:28094
I start with the bed below the plunger and slowly raise it up. When the bed gets close I move it .1mm at a time so it only lifts the plunger .3mm or so. I want it to touch as lightly as possible so it doesn’t drag too much as it moves across the bed.
I also used it to set the Z Offset at a known amount. It can be hard to tell when the nozzle and bed touch. You can’t see a gap of .05mm, and if you see the extruder bump, the bed has already pushed it past the 0 point. To find the exact place were they touch, I used contact between the nozzle and bed to complete a circuit.
I touched one lead of my multimeter to the bed, and touched the other lead to the barrel, under the insulator. This area is easier to reach, and easier to maintain contact without slipping off. I moved the bed up .1mm at a time, and once the multimeter showed a reading for resistance, I knew that contact had been made.
I set the indicator to zero, and then moved the bed up and down, adjusting the Z Offset screw each time until the dial indicator showed the distance I wanted.
It’s cool to see the actual offset distance, but it still comes down to watching the first layer and tweaking the distance until it looks the way you want.