I may be wrong here (so take anything I say with a grain of salt) but if you're playing with the tips, the callouses will form at the tips of your fingers. You know how when you're drumming your fingers? How the tips of your fingers are striking the surface of whatever you're drumming on? That's the part of your finger you want to be fretting with. How you place your thumb on the back of the neck will impact the angle of your fretting fingers. The better the arch, the better the fretting!

You're right - it's all about the practice. :)