If you can feel play in the bearing (straight in and out on the hub!), it is too loose.
The Chilton's recommendation is to tighten the nut until the wheel is "impossible" to turn (way, way too tight!!!) then back off 1/3 turn. What I do, and this seems to work, it so tighten the nut until you feel some rotational resistance. You won't lock up the wheel, just tighten until it becomes noticably harder to turn. Back the nut off about 1/2 turn, or a little less. Pull in and out -- if you feel it "thump" tighten up a tiny bit, check again. Tighten lock screw.
Best is to set the bearing for 0.001-0.002" with a dial indicator, very easy and they aren't very expensive.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!