Sorry, that wasn't really clear enough; I know what I meant, but you wouldn't necessarily know that from reading what I wrote. The vaseline should be put on the terminals after they have been assembled and tightened up.
It isn't, however, a big problem if you do it first (or have some vaseline smeared around from the previous time that it has been done and don't clean it up perfectly) because the excess gets squeezed out and the vaseline just ends up in places where there would otherwise be an air gap. If it doesn't, then you haven't got the terminals tight enough...
You are right that vaseline doesn't conduct electricity, and that's unhelpful, and keeping the contact surfaces apart with vaseline would be bad.
The problem of contact corrosion seems to have become less evident over the years, though, presumably as batteries have become better at keeping any corrosive fumes internally and not venting them. I still do the vaseline thing, possibly as much out of habit as anything else, but you do know that terminals assembled dry are going to be ok, when assembled new, but it is a little less clear how they would be after 4 - 8 years, however long the battery naturally lasts.