Your headset should feel smooth when you turn your handle bars. It should also be tight. To check for tightness, squeeze your front brake, turn your bars 45 degrees, and try to move your bike forward. If it rocks then your headset might be loose. There are two types of headsets, threaded and non-threaded.
Most newer bikes are non-threaded.
Tighten the top cap until the rocking stops, but make sure it stills turns smoothly. Remember to tighten the stem back up after your done. Check back in the near future for step by step instructions on how to overhaul and adjust your headset. You are now ready to ride. You might as well show a little concern for your rack as well.