As other have said, clamp the fence between two separate table top pieces.
Mounting a fence in a dado is not secure enough or anywhere near strong enough -
the saw is quite capable of pushing a cut-off piece of wood through a 3/4"
fence, if the situation arises. And, yes, the blade is meant to be behind the
fence (measured somewhat above the cutting height of the workpiece) when it's at
the back position. The front edge of the blade (behind the guard) can be
slightly forward of the fence.

If setup properly, a RAS won't creep forward, even when running. The blade runs
in a slot in the table, and the stand should be set so the motor/saw assembly
runs to the back stop under the pull of gravity. (Of course, when cutting, you
have to restrain the saw from feeding too quickly into the workpiece.)

You will probably have more than one fence, depending on what cut you are doing
at a particular time. And fences are meant to be replaceable. The only limit on
fence height is the bottom of the motor.

If you have a Craftsman saw, there still is a recall in effect -
http://www.radialarmsawrecall.com/ - that covered many saws made from the 1960s
through the 1990s. The free retrofit kit included a new saw guard and table.

Email me if you want more detailed measurements or pics...
--
JeffB
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http://home.san.rr.com/jeffnann/Wood...odWorking.html