It depends on what type of lathe you're talking about. My machinist took the route of bolting the wheel to a machining table, getting it centered relative to the vertical cutting tool, then removing the material. The wheel was what remained stationary during the process as opposed to the cutting tool. Not sure what the process is called though. Being initially centered though eliminated the possibility of runout, and at the point my main concern was whether removing material from that area of the wheel would reduce the structural integrity of the wheel itself. Believe me, knowing how much VX's weigh, I actually went so far as to consult a structural engineer friend of mine for consideration of that potential problem. He didn't seem all that concerned with the possibility due to the fact that the area would still be radially sound since it would basically be retaining the same shape.
I did first try to grind down the heads on the allen head bolts, but when you're talking about close to half an inch, there wouldn't have been much left, and no other fasteners I could come up with made up for that much of a difference.
Actually, the centerbore was always wide enough, so I'm wondering if you're looking at the correct area where the machine work was done.
The material that was removed is not towards the "back" of the centerbore (nearer to the center of the vehicle), it was at the end of the centerbore near the centercap. I've modified the picture I uploaded to indicate where I had the material removed to allow for clearance of the allen head bolts. Once the wheel cleared those bolts, the rest was history.