Looking at where the caps are, I would say there isnt any problem with bed rails working.
As far as cleats, yes they work but you have to do one of two things. They fit fine in their "Secured" state but getting them on or off requires to either slide them on from rear of track or pick out a spot on rail and notch it out a little so cleat can go on horizontally (the way it is when tightened down). Because of rail, you cant put cleat on vertically and turn it, too much angle. I chose to make the notch, took about 10 minutes for both sides. And in the end it is only 1" of rail that you cant secure the cleat and use. I didnt have to remove any of rails at all.
All in all I am VERY happy with it and have no regrets, I still havent found any water in bed after washes or rains. No rattling at high speeds and it LOOKS GREAT!!! The Kcover seems to be a good option as well. I think it really comes down to which look you like. The K cover has more of a "utility" look to it opposed to retrax. I also like the fact that retrax sits flush with top of bed.
My original titan had the passenger airbag issue. After A LOT of frustration with dealer, I had a lawyer get involved and in the end (LOOOONG story), the dealer gave me what I paid for the titan and sold me a new one below invoice. I couldnt pass that up!!! I decided to upgrade while I was at it and went from XE to what I have now.