Alot of times, people put veneer in place of where the fret tang normally would go, just to help the player find the right position. I guess I just assumed you where talking about a bass. Making a fretless guitar sounds pretty unusual. I wonder what it would sound like.
Oh yeah, On fretless basses you use flatwound strings instead of roundwound and the fretboard (rosewood, ebony, ...) stays in pretty good shape. Roundwounds will rip it up real quick unless you coat it with marine epoxy like Jaco Pastorius.