I'll say go for the 1/8th too.
A lot of people can't detect anything less than 1/4 inch out either way, and a lot of what you can detect depends on the suspension. I aim for 1/16th just because I can. You don't need perfect concentricity.
My prefferred 'tools' are my finger and a sharpie, or dry erase marker, rough it in using my finger as a gauge, then use a sharpie for fine tuning.
Have several dial indicators and agree, they're far too accurate and more difficult to use. With a sharpie they leave a visible mark, so you know what needs tightened where. That speeds up the whole process. mark, adjust, wipe it off and go again till you're happy with the results.
Ken.