I've seen several approaches put forward on this topic.  My boat has a stripe along the sheer line, across all the seams and along the bottom/side edge; everything else is varnish.  I chose to paint my stripes, taping off as necessary, and then varnish the entire boat (over paint and all). 

I used Brightsides green (can't recall the name of the green), and the only affect the varnish had was to add a golden hue to the color of the green (which, in my mind, looked better than the original color!).

I think the decision should be which way is most efficient for your time and effort invested.

Good luck; hope you can post some pics of the finished product,

Larry