I've balanced several (Lyc) engines using our EAA chapter's Dynavibe. It's not a very 'smart' balancer, and it's somewhat tricky to interpret their directions. But once you get what they're trying to tell you straight in your head, it works just fine. If you don't have it straight, you'll chase your tail for quite a while.
For Scott: I've never used any of the smarter balancers, but it sounds as if the major difference is that the DV doesn't tell you how much weight to use; it just gives you the acceleration number and the angle. But once you've added a bit of known weight & re-run the balance test, it's not that hard to zero in on the correct weight.
I've never added weight to the outside of the spinner to do my initial balance. I just go straight to longer spinner attach screws and add any weight to those, inside the backplate nutplates. Regular nyloc nutplates have worked just fine for me. I've had one or two where I had to make a weight, due to a badly out of balance situation (prop, badly cut spinner, etc). I've also split weights between two screw locations, as mentioned earlier.
On using the ignition as the trigger: Seems iffy with mags, and a nightmare if you have any kind of variable advance ignition. The optical trigger will fire at exactly the same point every time, and you can duplicate that point by simply moving the prop until the LED lights.
Nosewheel, etc: The prop does bounce the plane around quite a bit (I've done both nose & taildraggers), and it does seem to have some effect on the DV's ability to give a stable reading. I wonder if that's why DV tells us to run 3 sequences before adding weight.
Weight location: I wonder if the whole 337 thing is driven by drilling extra holes in the spinner backplate (that *is* a bit of a mod, especially on a TC'd plane). As a FWIW, I know of at least one local RV that has the balance weights from a DV balance job mounted on the flywheel, using the existing holes. Obviously takes a bit more weight because they're on a smaller radius, but it seemed to work just fine on that plane.