Either type of pickup will work fine, Kerry, assuming it gets the correct magnetic input. The stock Ford pickup and the MSD pickup are referred to as VR, for Variable Reluctance, devices. These devices work on a principle based on Maxwell's equations (figured I'd inject a little science/math into our discussion). The pickup in a Ford type distributor is basically a magnet with a coil of wire wrapped around it. A current will be generated in the wire whenever the magnetic field going through the coil of wire changes. The 8 teeth on the distributor's reluctor wheel are made of a magnetic material (probably a certain iron alloy). As a tooth lines up with the magnet pole, the magnetic field is directed through the tooth, and through the wire coil. This change of field through the coil causes a current to be induced in the wire. Because the wire has an electrical resistance, a voltage appears at the terminals of the coil, which can be detected with an amplifier circuit (Ohm's law: Voltage = Current X Resistance). When the tooth moves away from the pole, the magnetic field lines are no longer directed through the tooth and the coil, so the current through the coil changes again, resulting in a different voltage at the coil terminals. Note that this is a dynamic, or AC, effect. To get a signal output at the ends of the wire, you need a change with time in the magnetic field going through the coil. Also, the more rapid the change, the larger the current that is induced in the coil. This means that for the VR sensor in a Ford or MSD distributor to work, you need some minimum speed to generate a minimum detectable voltage at the coil terminals. It also means that the faster you go, the bigger this voltage signal will be, and the easier it will be to detect. There is essentially no upper speed limit to a VR distributor system, only a lower speed limit. (Of course, the lower speed limit is designed to be below the engine's cranking speed.) The VR system is also very reliable; electrically, it only relies on a coil of wire and a permanent magnet. Finally, a VR sensor is airgap dependent, meaning that if the teeth on the distributor reluctor wheel are farther away from the magnet, less magnetic field will be directed through the tooth, and the lower the voltage signal will be at the ends of the coil. So one potential failure mechanism for the VR sensor is a distributor bearing failure, where the reluctor wheel is not held in close proximity to the magnet as it spins by.
A Hall effect sensor is a solid state device. It is a silicon chip, like all the chips in any other electronic component. As a magnetic field passes through the silicon Hall sensor chip, a voltage appears at the terminals of the Hall sensor on the chip. The bigger the field, the bigger the voltage. This is a DC effect, so there is no speed component required. Therefore a Hall sensor will give an output even if the distributor is not moving (no lower speed limit). It also has no effective upper speed limit in an engine application; Hall sensor operate beyond 100 KHz (100,000 cycles per second), which is far in excess of any speed required in an internal combustion engine. In a Pertronix system the Hall sensor is "biased" with a permanet magnet. So, when the point of the stock distributor cam is closest to the hall sensor, the magnetic field from the bias magnet is directed to that point, through the Hall sensor, and a certain voltage will appear at the Hall sensor terminals. When the flat part of the stock distributor cam is closest to the Hall sensor, less magnetic field is directed through the Hall sensor, and less voltage will appear at the Hall sensor terminals. A Hall sensor is also very airgap dependent; the farther away the target is from the sensor, the less signal output will come from the sensor. Finally, as a semiconductor chip, the Hall sensor is probably not as reliable as the simple VR sensor.
The big problem I see with the Pertronix setup is that the stock distributor cam is not a good target for the sensor. Looking at the reluctor wheel in the Ford VR setup, it has thick points that extend out to the magnet, so there is a very clear difference when the tooth is present and when it is not. On the factory distributor cam, though, the difference is much less pronounced. This will result in a pretty small signal output from the Hall sensor, making it more susceptible to electrical noise. The engine compartment is a very electrically noisy place, and the noise increases as engine speed increases. With a VR sensor you will see increasing signal with engine speed, which helps to counter the effects of electrical noise. You don't get that benefit with a Hall effect sensor. I'm sure that when you had the distributor curved it was run up to some peak RPM and functioned properly, but in the engine with 8 plugs firing, the alternator whirring away, and whatever other sources of electrical noise are present, you may end up losing some pulses out of the Pertronix module due to noise. I have no data to back up this theory, it is just supposition on my part. But this is what has kept me away from the Pertronix setup over the years.
Looking back at your original post, you said the dyno operator's comments were directed at the stock distributor and the Pertronix module. It is possible that the dyno operator has seen issues with the Pertronix modules before, and this was the reason for his comments. Your dyno results showed a breakup in the engine's power at higher speeds, and this would fit my theory of increasing electrical noise with engine speed interfering with the Pertronix module's output. Maybe your dyno operate was onto something, but as I said I have no experience with the Pertronix modules so I can't back up my comments with any data. Take them for what they are worth.
Wouldn't an MSD box work with the Pertronix system? It will work with a VR sensor like the Ford or MSD distributor has, and of course it will work with points or any other factory style distributor pickup. If you are looking for a box I'd check out an MSD Digital 6.
Also, I know you have some money into your existing distributor, but I wonder if it couldn't be converter pretty inexpensively to a VR type pickup? You can find Ford distributors with a VR pickup at any junkyard, or buy rebuilt versions from any parts store. I think you might be able to just swap distributor shafts and mounting plates, and turn your Pertronix distributor into a VR distributor for less than $50. Don't know for sure though; you'd have to investigate that.
Hope this helps - Jay