The top or straight section of the rails should be level as well as side to side should be level. The side to side level should be checked in several places to make sure the frame does not have any damage, or a twist. Any damage to the frame needs to be addressed before any modifications are preformed.
The reason the manufacturer of the kit has you level the frame is so that you will always have a baseline for reference. At any time during your modification you can check to make sure all things are as when you started. It will also be necessasary when installing parts of the kit. The instructions may tell you to install something at a certain angle.
Having the frame level will also keep you from building a twist into the frame.
