Hi Bill, I've got a 3/8th plug cutter and am making cedar plugs to go in the mahogany outwale. Non-woodworkers are always impressed with plugs (how did you saw them so even?) so I want them to show up a bit. Going to epoxy the strip on the boat so the screws/plugs are pretty much non- functional except that having the screw holes pre-threaded at glue up time will be nice.
I see your point on the bedding issue.

: If you're going to screw them on they should be bedded. Use a
: marine grade betting compound to seal the outwale where it rests
: on the canoe's side, otherwise you'll trap dirt behind them
: eventually and when wet it'll cause dirty streaks in the paint.
: Also using bedding compound will allow the outwales to be fairly
: easily removed later on, some caulks could be used but they turn
: into glue eventually making removal difficult.

:
: http://www.reddenmarine.com/marine-supplies.cfm/sealants-bedding-compound/pettit-paint-2005w8/2005w-dolfinite-bedding-compound-pint.html

: Btw, plugs over screws are best put in with varnish as an adhesive,
: but watered down Titebond works too, allows them to be fairly
: easily removed later on without splintering the outwale. Plug
: cutters make plugs easy that match the wood exactly, just cut
: the wood for the outwales a little long and use the tails to cut
: the wood for the plugs.

: Bill H