Well, the mod had an effect but still doesn't quite work right. Unfortunately I don't have the option of changing the sensor parameter from 1 to 2, it's there but not accessible so this may be the problem.
I opened up the hole in the disc and glued a magnet in, which works fine. My Seiko has a large 8" pulley on the head which gives me about a 3:1 ratio. When I first fitted the NPS the motor simply wouldn't run properly, due to the ratio, and kept throwing up an error code. Fitted the modded NPS and now it will run fine but I can't set it to stop either needle up or down. What happens is if the needle is moving down when I take my foot off the pedal then it stops needle down, if it is moving up when I take my foot off then it stops needle up. Sometimes heel down sends the needle up, sometimes it has no effect.
An interesting experiment nevertheless - so near and yet so far.
Edit:I just re-read Captayne's post, referred to above, and I'm getting the same results that he did. While he thought that being able to "choose" whether you wanted the needle to stop up or down was great that will only work if you are sewing very slow, in order to "control" which direction you want it to stop. If you're sewing that slow then there's no need for the NPS anyway.