You want to pin through all three layers around the outside of the quilt.
Once the outside is pinned, trim all around the edges. I normally leave a couple inches on each side.
(And keep the excess fabric from the sheet - we're going to be using that to make the binding!)
Now, if you're really worried that you might have bumps - flip the quilt over and check out the back once it's pinned around the edges.
In this case, my sheet wasn't wanting to play nice (see the bumps on picture 3?), so I pinned and smoothed one more time. Once you're satisfied, flip it back over and pin like a madperson.
Seriously, pin all over. The more pins you have, the smoother it'll stay while sewing. As long as your pins are in the middle of squares, you'll be fine. :)