Generally, you stitch all your panels together, loosely (not floppy loose, almost snug).  When you get your rough hull shape, you carefully begin tightening the stitches.  Making stitches tight as you go through the initial stitching will result in a mess unless you are the luckiest guy on the planet.  This is a fun part of your build - a lot happens in short order.  It is very important to do it right because your final hull shape is the end result.  Some builders (don't ask) have pulled all the stitches and started over because they were in a hurry.  Work carefully and don't hesitate to loosen stitches and tighten more slowly in a different order.  When the hull is aligned and fair, you stop tightening.

Dean, I have no hands on experience the LapStitch process, but have seen the diagrams of the joints that CLC shows here on the website. I think the idea is to have the stitches holding the seams together as snugly as possible. If that means the edges of the first side planks extend below the surface of the flat bottom, they can be planed flush with the flat bottom after the stitches are removed. That's the standard practice for the more traditional lapstrake building methods.

Grant

Ref; comment by Old Yeller: I did not plane the protrusion on any panel and the very bottom ones seem to act as mini-chines. See construction photo's on Passagemaker kit page, page 25 I think.

Alan  

The #1 panel is suppose to stick out below the bottom of the boat.  You fill that overhang with thickened epoxy to secure the panel to the bottom of the boat.  You can see the overhang in this picture.

 BTW - There is a TON of information in the Passagemaker builders forum at  http://www.pmdbuilders.net/

Come join us over there.

  Jim