Craig,
You are a special case. I doubt that there would ever be TOO MUCH HP for you. It is an OZ thing as you know.
However, to you question.
By installing traction control, you have in essence controlled (read reduced) the HP (or Torque) that the chassis will see in a dynamic situation. Exactly the correct thing to do with your engine/chassis combination. By using traction control you have taken an inherently unstable platform and applied controls that will allow this platform to remain in a stable longitudinal dynamic window.
Percentage of slip is a complex issue. 5>10% is a good starting point. CART cars run as much as 30% and as little as 2% depending on venue and track conditions. The slip is adjustable from the cockpit in order that the driver can change for slow speed corners (More slip) and high speed corners (less slip).
One thing to remember, single dynamic traction control is not a panacea for total traction. Remember the friction circle. There is X amount of adhesion available from the contact patch. Applied lateral traction will diminish the amount of longitudinal traction available and vice versa. In other words, if you have the tires loaded laterally at 98% and you step on the throttle you will only have a 2% slippage allowance longitudinally. (In essence a 5% slip setting has now put you in the boonies.)
Traction control in F1 and CART cars also use multiple yaw sensors to factor in these variables. They also use fly by wire throttles and throttle position is altered to affect traction control and remain within the friction circle. You will notice that they still put them off now and again even with the best of systems. (Launch control is a whole different beast.)
However, you are going the right direction. With the Motec M800 I think that you are limited on the digital input side to 4 inputs for wheel sensors. I do not know if they can read the A>D outputs of two accelerometers and correlate with the wheel speed sensors to provide total traction control. But I am sure that OZVENOM will know how to do this and program them correctly. But with a manual throttle I do not know if a really effective friction circle system can be developed. But you can certainly make a single dynamic system work well.
You will need it with that monster motor. (I know that I would.)
