the way i have seen it done, they just did the area that the gasket did not touch. just the exposed bit that is actually in the combustion chamber. dont peen where the gasket will be trying to seal. i wouldnt even peen them in there honestly tho, because i know how hard it is to get them in and out of the head. and the only way a precup is going to damage your engine, is if the face breaks off the cup and the cup body stays in the head. and i dont think peening the head will save the engine if the face of a cup breaks off.
so basically, do it if you want, but if your head is in good shape, and you know your cups are good, dont even worry about it. the 4 years that i have been a member of the forum, only one time have i seen or heard of a pre cup breaking. and it was right when i joined the board. ever since then, i have heard nothing about people needing to peen there cups. i wouldnt do it, it adds surface area to the head, and makes it so more heat can be transfered to the head, and may even be enough to create a hot spot.