Just did this a couple of weeks ago. I know whippin boy knows way more about this than I do, but I did it a different way, and came up with good results.
I got an OD turning tool cutting dead nuts on size, and wrote down the X offset from the offset page. Then went back and touched off on the tooleye. Took the difference of the optimal offset and the offset that the tool eye just gave me, divided it by two, (took me a bit to figure out to divide by 2, R vs D). Then in the parameters, B63, change by that amount(6 digit #, no decimal, the last 4 places are for your 4 place decimal, ex, 10.9321 is 109321). Retouch and you should get the original offset that you wrote down.
For touching off OD tools, you need to get the ID correct, then change B61, which is the width of the tooleye.
As for the Z offsets, I've never messed with it, seems to work just fine where ever it is.
Hope that made sense.
This is jut my method, that I made up, with no formal training, but it seemed to work.