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The important thing when leveling frets or fret boards is to make sure the neck is at zero relief - a job that is much easier if the guitar has a double acting truss rod. In any case though, after the guitar is re-strung, I agree that you will need to adjust the truss rod for some relief after leveling frets. Hopefully it will be less relief and/or string height than was needed before!
The strings are completely loose. You may notice the string spreader which is there just to keep the strings out of the way. The string tension is simulated by tightening the lead screw at the base of the neck jig. Imagine a vise with a jaw opening that fits a guitar.
Simulate Guitar String Tens...View Instructable »