(yikes, my spelling! Need more coffee!
)
Here's an easier way to look at it:
The cross section of the o-ring should exceed the cross section of the trench.
If you're going to mill a trench that is 1mm deep, and x mm wide, then the cross section is 1*x (square mm).
If the o-ring's cross section is 2mm in diameter (radius=1mm), then the cross section is pi*1^2 = 3.14 (square mm). Your channel width would have to be less than 3mm.
Note: that means squishing the o-ring to half of it's thickness.
If the o-ring's cross section is 1.6mm in diameter (radius=0.8mm), then the cross section is pi*0.8^2 = 2.01 (square mm). Your channel width would have to be less than 2mm.
If your milling tolerance vary by as much as 0.3mm, then you'd be better off milling the channel 0.3 mm smaller.
Fixitt and Jaydee can probably tell you more.