The viewfinder on my camera has diopter correction, but is there a "correct" way to set it up? In the past I've just allowed the camera to auto-focus on a distant point, and then make sure that is as sharp as possible, but this seems to be prone to error, and reliant on the auto focus of the lens. Is there a better way?
What you're looking at through the viewfinder is actually the image from the lens projected onto a ground-glass viewing screen. You want the diopter level to be adjusted so you can see that most clearly.
Fortunately, this means that you can use the etched lines on the focusing screen, as well as the status information in the viewfinder, to adjust the diopter correction. Point the camera at a featureless bright-but-not-overwhelming subject (a white wall, say), and set the lens's focus such that the wall is just a blur. Now ignore that and set the diopter so the focus screen markings and indicator information are as sharp as you can get them.
Take a look at the focus screen in your camera. That actually has the same focus as the object in focus, and it's a lot easier to see. Adjust it until you see the thinnest lines possible, and you are set. Optionally, you can actually remove the lens to do this, as it makes it easier to not be confused by an object in the scene.
I just look at the LCD display you get in the viewfinder (that tells you your shutter speed, aperture etc.) and twist the diopter knob till that is at its sharpest.