Thanks for posting a pic of my rig at the top!
I have seen both, and think the Line-X(or whatever brand) looks fine WITH the moulding in place. If you remove it, you will have a thick line where the Line-X stops. On a dark colored vehicle it might not be as noticeable, but on my white truck, I'd prefer to have it tuck right up to the moulding.
Just my .02
Josh