Hey Henry, I am not an expert in this particular method, although I have read the manual a number of time and understand the dharma. Here are some thoughts that may be helpful.
1. Every practice can be done an a basic, intermediate or advanced way. You are perceiving some of these possibilities, and this is leading to confusion. Usually, we start in the basic ways to build up capacity, and the intermediate or advanced ways are likely to be ineffective as we don't know how to do it yet. But you can certainly try! However, if you find you are failing, revert to more basic practice. But don't let the uncertainty stop you from practicing. The ego protects itself in all sorts of subtle ways ... including creating uncertainty to frustrate practice.
2. Normally, you would start with low level noting of just the thing. (e.g. "Stepping" or "Feeling"). The normal (note I keep saying this) route is to learn to note with mental labels, then to up the frequency by mentally labelling more things, then to drop the labelling and just intuitively note, then to up the frequency more, then to start noting the arising and passing away of phenomona - seeing them come up, persist a little, and then fade. Then up the frequency more. Then become a conduit for the universe to observe itself a super high frequency flux through your mind, then to see for yourself at a deep level the fact of impermanence, which implies not-self, which implies suffering when these truths are denied, and thereby to achieve liberation.
But this is just one route - there are thousands of others in the satipatthana sutta.
3. Often people get the half-path of the Arising and Passing away, experiencing stunning perceptual distortions, and then progress to have their perception of self or reality dissolve a bit, followed by their subsconsious reacting with discomfort and various forms of pyschological escape attempts ("I don't want my perceptions to dissolve!"). When this happens your attention moves to the periphery and you can no longer note discrete events at high frequency - your focussed attention declines. The solution is to move from noting the body to noting emotions, and seeing them as they come up, labelling them, and clearly seeing that they are temporary, not you, and only a source of suffering if clung to. You only have to do this irregularly - even just once a hour! You can supplement this with investigation on an intuitive level - try to intuitively note the somatic feelings and mental connections of the things that arise ... what do they feel like? How do they change? Eventually you will move back to equanimity and can resume high frequency perceptual noting.
4. As we all start with unresolved psychological issues, these may come up and make the emotional stage worse, and prevent progress. If so, you may have to deal with them. This can be really tough, because they represent ingrained defense mechanisms, so you have to rip off the scab and drain the pus (ouch!). So if you have significant trauma and want to meditate. BE CAREFUL! Maybe therapy first? Or failing that, love and forgiveness are really good. Love your enemies. Forgive those that have hurt you. That's the easy part. The hard part is to forgive yourself, and love yourself. Forgiveness is the most powerful force in the universe. Then the reactive tendecies will drain away, and you can let go, relinquish, cease utterly those unskillful things, and look back your greedy or hating or deluded self with kindness and compassion. Letting go .... letting go .... letting go ... letting go ... letting go
Obviously all this may require other supporting practices. That is why the dharma is kind of complex and exhaustive. But hopefully that gives you a roadmap for the early stages.
Love
Malcolm
