From frets.com, run by Frank Ford, owner of Gryphon Stringed instruments, luthier, repair expert, moderator at the Acoustic Guitar Magazine forums "Luthiers Corner" site
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http://www.frets.com/FRETSPages/Musi...Adj/tradj.html
"The single most common misconception is that truss rods are for adjusting action or intonation. While adjusting the truss rod does affect the playing action, that's a side effect and not the purpose for the adjustment. As a general rule, once the nut and truss rod are set, all action adjustment is done at the bridge, by raising or lowering the saddle. Intonation is affected by action, too, so correcting the action may improve intonation, but again, that's a side effect."
Head back to the main index page at Frets.com.
FULL of information about guitars.
The section on how you properly adjust the action of a guitar;
http://www.frets.com/FRETSPages/Musi...raction01.html