I have done it two different ways,
1. Do not remove upper receiver assy. and front sight/gas block assy from barrel.
In this case I wanted to leave enough material "on top" to later file a pair of tapered dovetails so a new front sight would slide on like a pair of Sako Scope Rings. So I wanted the top surface to be flat and plumb with the flat top upper receiver rail (even though they would be at different heights). So after hacksawing off the front sight "A-frame" well above the gas tube support section, I turned the upper receiver over (sights down). My work bench was smooth masonite and I had duct taped a large mill file to one end with the cutting edge of the teeth pointed towards the center of the bench with a piece of scrap hardwood under it so the cutting edge of the file was plumb with the centerline of the bore. I then covered the upper receiver rail with smooth tape and applied some grease to it. So now I could move the whole UR back and forth by lightly holding down the read of the UR, while pressing down on the bayonet lug. This allowed me to "file" the hacksawed surface of the front sight A-frame perfectly flat, and this came out looking really nice. Needless to say, this procedure is for those of us without a vertical milling machine.
2. After removing original front sight / gas block.
This is the method I recommend if you realy want the minimum bulk (like for under a FF RAS). I grab the top of the front sight a-frame that I'm going to throw away in the vice and carefully hacksaw off the part I want to keep. Use a bench grinder to remove most of the excess "meat". Then I use a vertical belt sander with the sander's adjustable table set at 90 degrees to the belt. This allows you to use the flat rear surface of the sight to keep the surface you are smoothing down perfectly perpendicular. You can also easily rotate the piece from like 9 to 3 o'clock while using the belt sander in this manner and achieve a nice minimum bulk, rounded over look. I have also done this with just a file, but a good belt sander is the way to go. Even if you don't have a belt sander now, just doing one front sight "correctly" will convince you that buying a nice Craftsman bench mounted vertical belt sanded was worth the investment.
While you are doing this, keep a bucket of water within reach and keep dipping the part as it heats up. Also make sure the sander's adjustable table is close to the belt so the part can not get "sucked in."
This method also gives you the oppotunity to remove the forward handguard cap as well, which is usually the case when free-floating the barrel inside a forend tube.