Shaft runout is measured to check the shaft for roundness, bending and if it is measured in an assembled piece of rotating machine it may show if the bearings are bad or good.
Measuring it is so easy, if you have the shaft by itself,You put on 2 V-blocks, putting into account that it is carried by same diameters, You use the dial indicator at where you want to check runout.Morethan likely at the end ot the shaft.
Rotate tha shaft by hand and take the max. reading by the dial.
If you measured when it is assembled it is much easier you use a Magnetic Base Dial Indicator and put it on the foundation, and put the plunger on the shaft and rotate it and take the max reading.