I have a number of people using their Taig's for very fine work, but the one thing that was common to all of them was getting them to carry out regular maintenance. The starting point on my own machine is always to run the axis's on a full stroke cycle at the start of a session to 'wake things up' this also helps even out wear on the leadscrews. We tend to work in metric, and 0.05mm backlash is the point that we would be looking to tighten things up a little. That equates to about 1 thou. At that even the open loop controller does not have any trouble driving the machine.
You mention '7 thou before it starts moving' ... This could indicate that the plastic pegs in the coupling itself are perhaps not sitting right, and that your problem is at this point rather than in the table. My own method of checking the backlash setting is to set up a dial gauge and jog back and forward 2 or 3 mm and confirm that the difference is in the 0.005mm area. Normally I just do this check with backlash compensation off and this gives me the initial setting for that axis. Once a week check on this then shows how the machine is holding up, and any sudden changes can easily be picked up.
Since you obviously have a closed loop machine, what sort of speed have you got it set to? One of the changes I normally do is to reduce the 'default' to around half of the Taig supplied setting - speed and acceleration. Does not affect backlash, but does help with 'reset' problems.
Lester Caine - G8HFL
http://medw.co.uk - Home of electronics for the Model Engineer