Use a grinder or cut off wheel on rears. The fronts are thiner and can be cut with Left cut and Right cut tin snips. I simply followed the body line on the fronts. When you remove the flare the fender has a mounting flange. I simply cut it off and left the 1/2 inch bend on. Also there is a support brkt., remove it.
I also removed all inner (plastic) fenders. If you cut much higher into the fender you my have to relocate or toss your washer bottle.

Here is the photo's of Andy's trim job we did. CLICK ME

The front's we used a hand held jigsaw and made 1 continious cut with a high DPI metal cutting bit. Andy used the saw why I held the fender tight (it likes to vibrate) and just took our time. I would recomend putting a good amount of tape over the paint first as the jigsaw will possiably rub it off.

As far as the line to cut, if you look at Andy's photo's I've always just cut it on that line. I fit 35's on my XJ with the same amount trimmed with a 5" coil under the front and can still flex it to full stuff (bumpstoped correctly).

As far as the rear's I've always done the cut and fold method. Simply cut relief cuts every 2-3" (more in the corners) to where you want the fold to be. Than take a rubber mallet and bend over the folded area into the innner fenderwell. The paint will probally chip, so be prepared to paint a small area with bedliner (or something).

The problem with the rear is the fact of the pinch welds. You can only trim very minimally and keep the fenders together. The cut/fold method you don't have to "trim" any metal off, your simply cutting relief cuts and folding the metal over on intself.

Me and andy used the jigsaw on mine and it went pretty good. Just make sure you buy some good blades or you will be making a trip back into town for more. It went really smooth once i got over the fear of cutting up my fenders.