Once you learn them, pinch harmonics are second nature, but for someone learning them, I think it is a fairly difficult thing to explain with only text.
As Scott said, try different picks. I use Fender picks, so I don't know the mm measurements, but in those terms, anything less than a "Heavy" won't cut it. I personally use "Extra Heavy" ones. As far as pick size, the smaller the better, I say, as far as overall control goes. I used to use the Fender Teardrop Jazz picks, which are tiny!
As far as hitting the 'sweet spot,' keep trying. They're always hiding, and they change with every note.
Jay, your #2 method is not actually pinch harmonics, rather it is another similar technique called harp harmonics. Check out some of Eric Johnson's stuff; he has some cool lines that alternate between that and fretted notes.
Hope it helps,