I read that when installing new bearing/races in the front hubs of a 2005 Excursion, RWD, that one should torque the new bearings down to 20 ft/lbs while rotating the hub. Once that is done, back off the nut by 1/2 turn, the re-torque to 17 in/lbs.

I did this, but the shop that was doing my alignment indicated that there was some play in the wheel bearings.

So - my question is - how should the front bearings be set? And what should the final tension be on the bearings so that there is no play, but no too tight as to create incorrect wear?

 

That spec is correct. The main culprit is making sure the hub doesn't pop out a little when you back the nut off. If it does you need to take it back to 20ft/lbs and try again. I've never had a tool that would do 17 in/lbs so I always learned to do the last step by hand. Tighten until you feel a little resistance, then rotate and wiggle and tighten gently until the play is just gone. That's always served me well, but it isn't by the book.

Another thing I've seen is if you're re-using the rotor make sure the race is secure in the rotor. I had a bronco throw me for a loop doing bearings 15 years ago or so. If it was tight enough to take out the play it would get hot and make the grease run, if it was set to spec there was play. It ended up being the race loose in the rotor.

 

I just did bearings on mine, it is sort of a by feel thing too. I usually crank the nut down to set the bearings, back it off to where there is no play or drag and lock in the cotter, backing off if the nut needs to be moved for the cotter to go in.
When you put the rotor on with the inside bearing installed before installing the outside bearing make sure the nut is on or else the rotor could fall off, don't ask me how I know :-)
Don't forget to lube your caliper slide pins.