I estimate the gap with dial calipers but you can use feeler gauges to set the approximate gap. Apply glue to the ends of the blades then use an eyepiece to check and adjust for a parallel gap. I use a small low voltage halogen flashlight bulb for the light source. The bulb can be powered by batteries or powered with an adjustable bench supply to control brightness. The light from the bulb is diffused with a small ground glass plate.
Microscope slides work well because they are thin.
Apply 220 silicon carbide grit between the slides along with a little water. With a little circular motion, the glass will become frosted. The light source is placed in a one inch square aluminum tube. The tube acts as an integral lamp holder and light baffle. The exit hole for the lamp should be set at the mid height of the knife edge.