The two seals that come with the All Balls kit are different and both are to be used. They aren't actually seals, because these are not sealed bearings, they are actually more like 'dust covers'. The order in which the things should be assembled on the stem are like this. Thick spacer goes on the stem first, the "seal" goes on second, the bearing goes on next, the bearing's race is already seated in the neck. Then the stem goes into the neck and on top first there is the bearing's race, which should already be pressed into the neck, then on the stem itself you first place the bearing, then the "seal" and then test fit the thin spacer. Next screw on the stem's bearing retainer and see if it will screw down far enough to put the top tree back on or not, if not remove the nut to get to and remove the upper spacer, then put the stem nut back on and screw it down very hand tight but do not put a wrench on it. Now put on your top tree and continue with your assemble of the bike.
So, from top to bottom:
Top tree
Stem nut
Thin spacer
Seal
Bearing
Bearing Retainer
Stem
Bearing Retainer
Bearing
Seal
Thick spacer
Bottom tree
All Ball's seems to suggest, in their very poor instructions, that some stems are shorter than others and that in some cases the upper thin seal will not be required. They suggest you measure 'the stack' which is a waste of your time. The most important thing to check is that the steering stop on the bottom of the neck strikes the stops on the lower tree with one or the other spacer installed on the bottom.
