Chris,
I concur whole heartedly with everything that Matt has to say. The only thing that I would add, is that the checklist is just there as a reminder. In many cases it is straight forward such as turning a switch off, or checking the transponder is in standby, but in other cases there are actions that you have to know that go along with checklist.
During Primary, alot of ppl mark up their checklists with pencil to help remind them of stuff, god knows I was guilty of that. So, to answer your question, yes, it is "anal", and you will be expected to know what buttons to push, what gauges to look at, and possibly what tolerances are allowed (altitude with 75 feet of field elevation on the altimeter for example).
I can't speak for the jet community, but the checklists in Adanced for the T44 (Props) take on a life of their own. It is VERY important that you know all your actions and what you are checking for with each checklist item, and god forbid you repeat back the incorrect reply, for instance you say "checked" instead of "set"... Also, since we are multipiloted, the copilot reads/runs the checklist, and the pilot does the action items and replies. In some cases in the P3 you are getting responses from various aircrew in the tube.
But as Matt said, when it comes to Procedures (clearly written out in your books), and the Emergency/Normal Procedures (in NATOPs), there isn't any grey area there, you HAVE to know those by heart, or risk having your ass handed to you in flight.