If you are accurate with your layout the 1/4 inch or so clearance is lots. The main secret I found is to clamp your two end plates together and drill them together so they stay square to each other. I would however definitely recommend making your blocks out of something other than mdf if you can, as it is difficult to tap it well. I threw out several mdf blocks before buying some aluminum and making them from that instead.There are some pics of my ongoing build here if you want to check it out.
http://www.cnczone.com/forums/showthread.php?t=76277 (First Machine- Northboys yet another JGRO variation)