Yes, as Tom already noted, this is a dumb switch, serving only as a reminder for whether the pack is charged or not. I personally never use it !
I have rebuilt all my packs replacing the 1600 mAH NiCds with 4200 mAH NiMhs (don't forget to reuse the charging port's diode, and the thermal fuse located between the cells). I got very helpful info from Chuck Tribolet's page
http://www.garlic.com/~triblet/sb104/ to start with, and took it from there.
I haven't checked the performance of the strobes, as far as number of full flashes is concerned, but I guesstimate to be no less than 300. That should be more than enough for a normal dive shoot, considering than most of the firings will not be at full power, and that would bring the number up, even higher. The awesome upgrade is on the recycle time, which is a fraction of the one from NiCds. (The strobe's thermal cutoff will kick-in a lot more frequently if you shoot paparazzi style!)
I also replaced the Nikon chargers with newer NiMh capable ones. I decided to do this for two purposes: first, I wasn't so sure how the old nikon NiCd chargers would behave with the new huge capacity and different technology cells (didn't care to experiment as well), and second, the two new small chargers I got are (combined) smaller and lighter than one of my Nikon ones (helps with travel weight management).
Hope I helped a little...
P.S. I must have a manual for the charger and for the battery pack laying around somewhere. If you need any info mail me.
George N. Ballas