I would guess that this is one of my more overdue posts.
It is about the steps between the finishing process and the 'glassing process. After the canoe is stripped, outer stems (if you have them...) are installed and shaped, and any fasteners used to hold strips in place have been removed (if you didn't go staple-less..) you need to fair the hull. At this point, the hull has facets made up of the individual strips.
You want a nice, smooth, fair hull - by fair, I mean "canoe shaped" without dips or lumps. Fairing is accomplished with planes, spokeshaves and longboards. I've talked about fairing and longboarding before so I will not go into detail here.
After you've faired, take a cloth with warm water and dampen the hull slightly - this will make any residual glue spots show up more clearly. Circle these areas with a pencil (lightly - so as not to make dents!) so when they dry you will know where to sand to remove the glue. It will show up as light spots when you fiberglass the hull.
In the process of building a cedar strip canoe, most beginning builders will have some small areas where there are gaps, checks or holes in your boat. First, I should explain that they're not a problem for how waterproof the canoe will be - they're mostly cosmetic, but can cause some problems during the fiber-glassing process. The major problems are bubbles caused by air escaping from the gaps and epoxy running between the hull and the forms - either bonding the hull to the forms or the forms to the strongback. This can also lead to "starved" spots in the fiberglass cloth.
To deal with any of these areas, we make what Nick Shade of Guillemot Kayaks refers to as "Dookie Shmutz". This is a mixture of epoxy that has wood flour added to it to color the epoxy and some fumed silica to make a non-sagging mixture. Wood flour is simply what it sounds like - fine wood dust - you can get a good color match by saving any sanding dust from the fairing process. By non-sagging, I mean that it doesn't run. The mixture should be about the consistency of peanut butter.
Some people have recommended mixing white glue with the wood flour to make a paste filler, using wood putty (i.e. "plastic wood"), auto body fillers or even some of the pre-thickened epoxies such as System Three's Quick Fair or Gel Magic. First, I can't recommend wood putty or auto-body fillers as they are brittle. I don't recommend using wood glue mixed with wood flour for two reasons - the epoxy doesn't bond to the glue and cosmetically it's not very good-looking on a bright-finished canoe. If you are not going to have a bright finished canoe, (i.e. a painted canoe) you could use the other epoxy-based fillers.
So, if you are going to have a nice looking bright finished boat, you'll mix yourself up some Dookie Shmutz. We usually use poly squeegees to apply the filler to the cracks. The best way to think of it like spackle for holes in the wall, but for your boat - you want it in the cracks, but not all over the wall. Dookie Shmutz that gets on the lighter colored wood will show if you don't remove it by sanding later. This material is very, very hard when cured, so you don't want to get too much excess on the hull. It's not out of line to use some masking tape around the gaps to help keep as much of the filler off the hull as you can.
This is what the bow of the Prospector Ranger looks like after some filler has been applied:
In the bottom picture, you can see that some of the material near the stem has been sanded away. In the next image, you can see some dark lines that are showing between the strips and all the excess has been removed from the wood.
While the filler looks dark now, once the hull is saturated with epoxy and 'glassed, it will darken. Over time, the cedar will mellow and darken, getting closer in color to the the filler. Still, you must keep in mind that both the Dookie Shmutz and any areas of the cedar that have been damaged by staples, nails or any other mechanical damage, will be slightly darker because the fibers have been damaged and simply are darker in color.