Sorry guys, still getting settled in so I havn't worked on it much at all. I also haven't driven it much because my transfer case is leaking ATF out of it breather.
Anyway, I received a PM which is what actually prompted me to come here and give an update. The question required a lengthy answer so I thought I would post my response in case it came up again.
Mr. Someone... said:
I have followed you over from XXXXXX.com with the same user name (Mr. Someone). Anyway I have decided to do a 4bt swap on my K10 Chevy P/U (4x4 - 1/2 ton). and wanted to know what the reluctor ring was for. I just picked up a 4L80E with a NP 208 and was curious if I could incorporate a permanent fix (need suggestions) with my set up. Also what controller did you use for your 4L80E?
Any information is appreciated, and by the way... Great Build. I have studied it time and time again.
Hey I'm glad you like the build. Havn't had a chance to get back into it since the move. The reluctor ring is what tells the controller how fast the transmission is spinning. There is 40 teeth on it and this magnetic sensor counts the teeth as the shaft spins. There are two, an input and an output. All 4l80E's have the input ring, but some 4x4 4L80e transmissions are missing the output ring. The reason for this is because the the GM transmission controllers rely on the final spin of the transfer case so a reluctor ring is put in the tail housing of the transfer case. As GM started to cut cost they stopped putting the output rings in the 4x4's to cut cost saving a buck or 2 per transmission for a part that wouldn't be used anyway.
In the image below, the hand is on the INPUT ring sensor, your transmission will definitely have one of those. The one that the hand is NOT on is the output. You will want to remove the sensor or plug and shine a flash light in there. If you see teeth dead smack in the center of that hole then your transmission has a output ring (which is awesome). If you see teeth but its only an 1/8th or 1/4 inch in view then you do NOT have a ring.
I use the optishift controller. It works great for me but it isn't considered the best controller and it requires the output reluctor ring to be in the transmission NOT the transfer case. This is good for some and bad for others depending on your setup.
The compushift controller is considered the better of the two and it requires your reluctor ring to be in the transfer case. Again I'm not sure what you have. Compushift also recommends a tach sensor on the engine as well.
I'm not sure what your setup is so its hard to help any further. Is the 208 already mounted on the 4L80E? Because as far as i know the adapter needs to be modified to accommodate an np208. Also I don't think there is a place for a reluctor ring in the 208, maybe Im wrong.
DODGE!!!! 
