Vince, i think the halls effect are nice sensors as that is what i am using.
With no power to the spindle, manualy turn the Taig spindle slowly and you should see the green light turn on and off in diagnostics.
Does it do that?
I will be in here for a while, can you quickly try it out?
I'll take a look at your xml, try what Hood posted.
What kind of optical sensor are you using? I had a bunch and could never get the output voltage high enough to change the state of the pin need at least .8 - 5??.
RICH