It's been my experience with the N.Z. indicator setup that if you fish pools, flat, slack water with light, small nymphs it will do an admirable job. But if a lot of your fishing is deep, fast, riffles with tandems or trios of heavy nymphs, you're better off keeping the N.Z. in your vest. It simply won't float high or at all under these conditions regardless of how much Gink or Loon you drench it with.
The purpose of an indicator is to float high at all times so the angler can in turn detect any and all subtle takes. In order to get your rig down to where the fish are it needs to be heavy. The trapped air (thingamabobber) and poly yarn indicators are capable of supporting a heavy setup, the N.Z. is not.
On the spooking issue, I don't feel a floating plastic ball is any more alarming to the trout than is a ball of sheep's wool that keeps bobbing a couple of inches in and out of the water.
The best high floating indicator I've found is the Air-Lock http://www.skru-it.com/prod_airlockindicators.php
Adjustable with two fingers of one hand, easy on and off and most importantly, won't kink your leader. If you must use an indicator or one that will hold up your rig under all conditions I think this is your best bet.