This question comes up a lot, so I figured I would put together a compilation of what to's and what not to's. Some of this will be car dependent, but most of the advice will work on any car. I am writing this article in the order of how i tune each of my personal cars. you can switch the order around, however i do not suggest it. I am working on some setup sheets you can print of and record your changes on, I should have them up shortly
Of course the first thing anybody should do is put the car together and drive it. If by this point you haven't already gotten rechargeable batteries do so. you will save money in the long run. If you can't afford Lithiums right away, it's ok, the Xmod battery kit is a good deal, you get a 45min charger and 8 batteries. if you want the IC3's are better since they charge in 15 minutes and have a better MAH rating, but the four bank charger is $35 and the batteries usually start around $15.
Next I suggest working on the cars handling. If you can go fast, but can't turn it's not going to be a very fun race. The first thing is to do is center your servo. Note the Wide track bearings will help keep the car straighter. at this point i also usually add the steering and suspension kit. there really is no magic formula for this. I usually use the medium springs in the front, and soft in the back. Rob at atomicmods sells them for $2 a set if you don't want to get the whole kit. the tie rod i use depends on the course i am driving. to begin i set the batteries to the center position for a more even balance. Rob also sells tires for $1 - $5 a set if you don't want to get the whole upgrade kit. To test my setup I usually set up a course with empty pop-cans painted red for left turn and green for right turn. BTW this makes a great drift course on a slick floor. some things to look at to determine how your setup is doing are.
Pushing: the car doesn't want to turn fast enough causing it to push to the outside of the corner. you can solve this by using a softer front tire/spring or a tie-rod with more toe in. and a harder rear tire/spring or loosening the diff. additionally, you can also move the batteries forward. Make one adjustment at a time and note the differences in handling. if your running on concrete or asphalt that can easily be washed off, you can spray some soda or sugar water down, but wait till it dries before you drive on it.
Oversteer: the car gets too much bite and tries to flip or spin in the corner. use harder front tires/springs and less toe in on the tie rod. and you can use a softer rear tire/spring. additionally, you can also move the batteries back closer to the engine. again only make one adjustment at a time till you get the proper handling for your driving style. this could also be caused by too much grip, try moving to a slicker surface.
Hopping: the back of the car hops while accelerating in a straight line. use softer springs or tires in the back of the vehicle. move the batteries back will help put more weight and plant the rear end better. this is tricky though because on some surfaces it could be a problem of getting too much grip. if this is the case a harder/slicker tire will help out.
Spining the tires: this is caused by not getting enough grip, switch to a softer/treaded tire, or a grippier surface. if your running on concrete or asphalt that can easily be washed off, you can spray some soda or sugar water down, but wait till it dries before you drive on it.
remember do changes one at a time, test then if you still have the problem do something else and test again. And any performance upgrade will change your setup
The next thing to do is get everything running smoother. the best way to do this is a combination of bearings and lubrication. you should be able to get a good bearing oil from the LHS, or RS sells some but i don't remember the sku off the top of my head. try to find one that comes in a "pen" style container with a long thin needle tip. Take your car apart, and lubricate every bushing. it doesn't take much just a drop will do ya. if you want bearings get a set of atomicmods wide track. it's only $10 more than the RS kit and they are much better quality. if you already got the RS set, don't worry you can get just the bigger wide tracks, from rob and it only costs $10. course since your a member of this board (xmodRC) he does have a members only section, but you must have 10 posts to get these great deals. Note that the wide tracks remove play in the wheels and help the car run straighter. Lastly take the entire rear end apart to remove the diff. once you got the diff out pull it apart and add a drop or two (it doesn't take much) of the oil to each of the bigger gears, then reassemble. screw it tight and back the screws out 1/4th turn. give a drop or two to the pinion bevel and outside of the diff and run it around for a charge or two to make sure everything is well oiled. remember that loosening the diff and making it run better will affect how the car turns, so you may have to tweak your suspension again.
A word of warning about Oil and Bearings. you must clean them out from time to time. the oil will collect dust and hair much faster than a "dry" car. It is suggested not to use either if using the car mostly outside.
Now that you got your car running tight it's time to add the speed. Now i know most of you are going; "Cy, why not motors first then the rest? this seems like so much more work." well your kind of right. this is a little more work than just dropping the motor in and setting it all up from there, but this way gives you a much better feeling for the car. it gives you a better chance to learn how the car reacts to each situation and upgrade. besides a big beefy 454 is nothing if the rest of the car or you can't handle it. I am sure by now you have prolly gotten the stage two motors. Those are a good start. but you can go faster. Rob sells a "long can" 180 which you will need to add pinion, caps, and a motor wire to (don't worry he sells those to). the 180 has a tremendous amount of torque. and is a good motor if your looking to upgrade from the stage 1. he also has a series of short can motors which perform very well. try them out. get used to handling the faster car. but don't forget to test adjust and test some more before the big race.