I ended up cutting off all the headliner from the pinch welds and let the teeth do their job.The headliner does not need to be glued at the front - only the gripper teeth hold it. Edges will be hidden by the windshield gasket. I'd also trim it away from the pinch weld to allow a good seal.
Good reference here: http://restorick.com/tech/topic.asp?TOPIC_ID=5