Davemann,
I have some experience with the Insteon motion sensor and I would have to agree with you that it is not the best piece of hardware. My experience has been, like yours, that it doesn't always pick up motion however; that is the least irritating part of this device. My biggest problem is that the motion sensor, like many insteon RF devices, has very limited range. Much, much less than they advertise. I have four of them and it seems like there is always a problem with at least one of them at any given time. I am so frustrated that I am considering upgrading my ISY 994i to Z Wave and try some of the Z Wave motion sensors to see if they perform any better.
Sorry this may not be too helpful for your situation but thought that I would at least commiserate with you regarding this frustrating product.
Alan