The one with the lip in the bore also has the threaded retainer ring (absolutely required) - that bearing locates the rim on the axle stack. The other bearing "floats" - it moves relatively freely from side to side and finds the spot where the races are aligned on both bearings.
Most Honda hubs are bored a bit tight on the floating side, I tend to enlarge them slightly with 600 paper.
Whatever, to get the bearings in and aligned:
Mount the axle straight up with the head in a vise, or have it on a solid floor pointing up. Put the long solid spacer (the one used on the assembled axle) on the axle against the head. After the retained bearing is installed (and the ring tightened and staked) slide the rim onto the axle (retained bearing down) and put the hub spacer in (it should fit through the floating bearing bore). Slide the floating bearing down the axle and into its bore. Since it's on the axle, it will be square to its bore and can not tilt and bind.
As gently as possible, tap the bearing in with something that only hits the outer bearing race (a big socket or some PVC pipe the right size). Note that you are also hitting the retained bearing in a bad way... so if the floating bearing's bore is too tight to move it without extreme hammering, I recommend opening the bore a bit. These bearings are designed for radial loads but can handle the axial load of this installation method - unless you need the "big hammer".
Tap the bearing down until its inner race is against the spacer. You should hear and/or feel the difference when that happens, don't force it any further.
That's it - beer time!
This method seats the floating bearing with its races misaligned in the same direction as the retained bearing (both inner races are pushed "up" relative to the outer races). Remove the axial load (the weight of the rim/wheel) and they will both be properly aligned with no play between the bearings and spacer.
Once you lift it so the axle is horizontal, the axle should spin freely - with the bearings. A few miles riding will allow the floating bearing to shift and perfect the alignment.
If you seat the bearing with the retained bearing free (not with the rim sitting on it as above), you end up with both bearings misaligned opposite ways (both inner races pushed "out" relative to the outer races) and get the binding you describe. It will eventually align itself if the bore is not super tight, but the floating bearing outer race will have to move quite a ways (relatively speaking).
The best way to do this is using a tool on both bearings that contacts both inner and outer races. You need two cylindrical metal spacers a couple of inches long, fitting loosely in the bearing bores and with a centre hole to fit the axle, with flat and square ends. The retainer ring is installed after seating the floating bearing. Same procedure as above but with the tool in place of the solid axle spacer used above. You drive in the floating bearing with the other tool until it seats against the internal spacer. Both bearings are properly aligned while doing this, and the undesirable axial pounding load on the retained bearing is avoided. For just doing your own bike every few years, this is not worth it unless you happen to have a lathe in your shop (lucky bugger).
