I set them cold first by adding .002 to the intake hot lash measurement and .003 to the hot exhaust lash measurement. Then I get the engine HOT (not warm) and do the final adjustment using the two position method that you describe using the hot lash specs. I find that if I use this method to set them cold first, it is much easier to do the final adjustment...when you get lucky, none of the valves need any fine tuning! Saves the amount of time that you spend leaning over a very hot engine.
Matt
