I know my rear wheel is not 100% true, but when (how far out) does a wheel have to be before it's a problem and cause ride issues?
I notice my bike feels like it's on gravel when cruising.

 

The vibrations caused by a wheel tha's out-of-true by only a few thousandths of an inch would surprise you. It will cause all sorts of other problems like wheel bearing and suspension wear, which will in turn affect tyre life. I'd try for a replacement if I were you........I wouldn't run it on my bike, if I could avoid it.

 

I've a small "ding" on my rear tire, but I dont notice it at all. I've had it on the CS and ran it in gear. I can see the dent on the edge of the rim but the tire looks good everywhere else and I dont even notice it while driving. If you do notice it in your butt then its probably worse than mine and it can (like Shadow with the grande ego said) cause suspension problems. When you say it sounds like gravel or driving on gravel, that doesnt sound to me like a wheel vibration. Perhaps its something else causing that sound/feeling?

 

There no sound, just feels rough, I notice it really badly the othe day, I was coming back from my first camping trip on the bike and had bags and stuff on the back.
The bike has nerver felt right, I'm going to go over things front and back and see what I find, it would be interesting to know how far out-of-true a average bike wheel is.
I will let you know what I find.

Thanks

 

According to the manual runout (radial & axial) is 2mm (0.08"). Axle runout is 0.2mm (0.01") It doesn't take a lot to throw out tyre & wheel balance. I had a steel inflater fitted to my front wheel. The shop didn't seat the tyre correctly so it now runs out of true. You can't see it just by looking at it but if you spin the tyre by hand you can then spot it. Not nice riding with the bars bouncing. Time for another shop. What I'm trying to say is the smallest thing out of whack can have surprising results.