The rim of a bicycle wheel needs to be a round circle and a flat disc. This gives a comfortable ride and is most important if the rim is used as a braking surface.
Use The Brake
Watch the wheel rim where it passes through the brake. If it moves from side to side as it spins then the rim is not a flat disc. If it moves up and down as it spins then the rim is not a round circle.
Where The Bike Has No Rim Brake
If the bike has no rim brake you can improvise another index by lashing a pencil to a seat-stay with a rubber band or a cable-tie.
A Wheel Truing Jig
The easiest way to check rim truth is using a wheel jig, also known as a 'truing stand'.