I have had a champion 3500/4000 watt generator I bought new for about 2 years now. It starts right up on the third pull as a rule when cold and runs fine under load and always has. If I shut it down, it often takes 5-6 pulls to restart but always does. It is quite smooth. However, when there is no load on the generator, it has always idled with a lot of loping/surging. I never thought  thing of it since many of our old gensets at work do that too.

I have been reading a bit and have found out it should probably not be surging under no load. Anyone have thoughts on whether this is a real problem and if so, how to fix it? Thanks.

Check carb for blockage in the midrange fuel ports.
When the throttle is closed, idle ports are behind the blade. (engine side)
As the throttle blade is opened slightly, it passes the midrange ports. There may be 2-3 holes or a slit.

Slightly heat and bend the end of the red straw that comes with the carb cleaner; so you can get it in there and flush crud back through the carb.
On second thought..........
Before going through that, grab the throttle linkage (the one that runs to the carb after the governor); and force the engine to run at the right speed with no load. If it runs nice there might be spring/linkage issues. If it misses or changes tone like it is running lean, then carb work is in order.

There's also a mega thread at RV.net that seems to be the center of the Champion generator universe.
Found it.     http://www.rv.net/forum/index.cfm/fuseaction/thread/tid/15131645/srt/pa/pging/1/page/1
Use supreme Google fu to narrow "surging generator" results to that site.

Ok. I called Champion customer service today.

I was on hold for a total of about an hour. Sucked.

I got a tech eventually who told me to try shortening the small spring on the governor arm first and then try a carb clean if that dos not fix my problem. Fair enough.

I asked what the price for a new carb was and it was about $28. Great! I'll take one as a spare!

Tech says they have no carburetors at the moment but expect some in "about a week". Kinda sucks.

I hang up and go home after work and try shortening the spring the roughly 1/4" he recommended. Success! The thing idles perfectly now and the problem is resolved with no money spent. Great!

The spring is a light duty looking thing and is easily adjusted for length by pulling it through the hole on the black arm at the carb just enough to put a new bend in it with the needle nosed plier. No need to remove the excess length. 5 minute job.

Double check voltage and hertz while loaded.
Hz will be a  direct function of engine RPM;  if you have a tach, check for proper engine speed

I think the champions are somewhat regulated..  It might not vary until going past 3800 or 3200..      Not sure what they call it.. I metered the output on one this weekend, as I was impressed with how quiet it was and needed to check for my own gratification.

he was pulling from the 220 and I saw 18 amps when the heater kicked on and the rice cooker was on.   but the freq stayed exactly 60.1

If you need any more help from them, try e-mailing them instead. I've done it around half a dozen times, and they've always responded almost immediately with thorough, concise replies.

One other consideration for improving engine smoothness is the spark plug (age, brand and heat range). A "cold" plug won't perform as well until the engine has been running for a while under load. Conversely, a "hot" plug tends to work best almost immediately after start-up, but can cause other problems (i.e., wear out prematurely or cause preignition) when operated under sustained heavy loads. Typically, Champion Power Equipment recommends 3 different spark plug heat ranges, depending on your anticipated operating conditions.

Would the spring trick work with one of the HF 800 watters?  Mine surges a bit unless it has a little choke on.

Surging at no load is something that almost all 2-stroke engines do. It's normal.