I started by coating the entire gun with a coat of the lightest color and then added the pattern by spot spraying with darker colors.
Yeah, the 'paint' will very easily flake off if you don't let it dry long enough. I can't recall how long it took to dry, but be patient, I understand the temptation to pick it up before it's ready. Also, I applied a heavy coat, and a lighter second coat, so even if a bit flakes off, which it did even after drying, the gun should still retain the color. I think a certain amount of flaking is normal, or at least it was in my experience.
Keep in mind that my gun still looked decent after 6+ months and a couple 1000 rounds. Only showed black in areas of high traffic (PG, handguards, stock, etc.) and places where solvent built up during cleaning (around the various pins and such).
Here's a shot before I took the bowflage off:
[img]www.ar15.com/members/albums/HKocher%2Facogtopsml%2Ejpg[/img]
As far as your grip, I don't know how it reacts with rubber, but it did not damage my stock or plastic KAC panels, even after over 6 months of sitting on the gun.
I used CLP, gun scrubber and Hoppes to remove the Bowflage (not at the same time though), and I found the best results came from using good old fashioned Hoppes and a lot of scrubbing with the ol' toothbrush.
BTW, none of these solvents caused any damage to the finish or the plastics, and the gun looks good as new now that it is back in black. However I remember someone had problems with CLP (in conjunction with the Bowflage) taking the bluing off a Rem700, but probably not a problem with an AR due to the finish.