I had a Zagg full body on my 3GS, but could not get the Defender case to close all the way over the skins, so I first removed the back skin. Still couldn't get it to close, so I removed the front skin. That did the trick, and allowed the case to lock closed, but I got huge water marks and moire patterns all over the screen. (I wish i had tried the Zagg Screen protector against the Defender's front, just to see if it was anti-glare/textured enough to prevent watermarks, but I didn't)
I tried the Windex/newspaper trick, the baby powder trick, the saran wrap trick, and neither worked sufficiently to make me happy. I ended up picking up some cheap anti-glare screen protectors and after applying one, all offending marks are gone. I'm not 100% sure, but I think the screen might need a little extra touch at the 2 bottom corners sometimes to get them to register (the back arrow and the next page buttons when using Safari). Other than that, everything view wise is excellent. I didn't even have to raise the brightness any as I thought I was going to have to do.
There's also another trick where you take the clear plastic that a CD or DVD case comes wrapped in and cut it slightly larger than the Defenders window and just lay it on top of the phone's screen. then you place the top section of the Defender case on top of that. I have not tried it myself, but I have read about it and figured I'd pass it along.
Oh, for those unaware...if you want to install a peel and stick screen protector without trapping any dust particles, you can try this....install it in your bathroom.
Go into your bathroom, remove any carpeted bath mats. If you have a ton of towels in there, you might want to remove them too. You want to remove anything that's going to release dust into the air. Then turn on the water in the bath/shower with it set to maximum hot. In a minute or so there will be enough steam in the air that will attach to all the floating dust particles in the air and make them sink to the floor. As long as you don't dance around in there, kicking them back up into the air, you should now be in a dust free air space.
As a disclaimer...I have no idea if steamy air is enough to trigger the water sensors inside the phone. So, do this at your own risk. All you need is a little steam in the air to knock the particles down to the ground. You don't need to make the room into a steam bath