There is much information on leveling frets throughout the internet and here at MEF but there is one thing I have noticed about wooden guitar necks: no matter how level they are when you adjust the truss rod without string tension once you tune them up to pitch you will have high and low spots as can be detected with a 3 fret rocker tool. Wood is organic and as you increase the string tension it doesn't flex with perfect evenness. Even going from 9's to 10's can change the equation.
There are many different approaches to leveling frets under string tension, ranging up to the $600+ rig at StewMac which will hold the guitar in a vertical playing position, keeping the neck under normal tension.
On eBay there are several different leveling systems which will sand frets under the strings tuned to pitch ranging from $50 to $150-250. I ran across this post at TGP which spells out how to do that for a fraction of the price.
I picked up an 8 foot length of 3/4" × 3/4" × 3/4" U-Channel of 6063 aluminum for $10.55 from Grainger Supply (their stock # 6ALY7)Originally Posted by PFCG, TGP
The TGP discussion goes on with some people griping about the 8" length. Well, with 8 feet total I cut various lengths to accommodate different areas of the fretboard for spot leveling as well as full fretboard leveling.
And of course you had people saying that they had been leveling frets for years with no problems so why change?
P.S. I really liked the author's suggestion of using a piece of glass for making the edges of the u-channel perfectly smooth. (If the glass wasn't completely flat it would look distorted.) I found a 18-1/2" diameter tempered glass table top at Goodwill and used self-stick sandpaper in various grits (320 from StewMac, 180, 220, 400 and 600 from Klingspor.)
P.P.S. A notched straightedge is very helpful in making sure that you have the neck completely straight, which is important when doing full length neck leveling. For spot leveling using a 3 fret rocker you want the guitar under normal string tension for whatever gauge strings you will be using.
P.P.S. I use an uncut nut blank to raise the strings high enough to fit the u-channel under them.