It's hard to explain the problem but you can clearly see it in the video i have. I made the clips into a visible texture so you can see whats happening
http://www.youtube.com/watch?v=EtDY4PF2B3Y

is it separate meshes? i would just recommend making a curve patch and put it around it. then apply a "clip" texture to it

Make the whole thing as a patch first. Then edit the smoothing on it by pressing shift+L 2 times, so you have blue/red vision. Then edit the clip by pressing S and modifying it. Cant really say which setting is best, but try them. SirJammy helped me with this, so thanks to him also