The directions for the VFD conversion were probably based on the 1340GT basic VFD install instructions that I have posted, you can look up the thread if you want more details. The thing to understand is that you loose the mechanical advantage of the gearbox below the motor base speed of 60Hz and gain the mechanical advantage above 60 Hz. Motor Torque stays pretty flat down to around 15-20Hz with normal (non-inverter motors) and falls off in a non-linear fashion above the base speed. Hp is a bit of the reverse. So what does this mean in the real world, well for heavy turning you probably do not want to go below 30 Hz, threading and light turning is OK down to around 20 Hz. Below this point you loose too much power, and a TEFC motor may encounter some cooling issues with "prolonged" heavy use below 20Hz. The upper end, standard 4P motors are mechanically sound to at least 2X and higher of their base speed, the limitation is standard motors have some degree of performance drop off above 100Hz. There is no detrimental effects of running a smaller (under 10 hp) 4P motor to 100Hz. Their is the mechanical advantage and gives you a wider speed range. Cooling is also not an issue withing the speed ranges mentioned.
On the 1236T and 1340GT, when using a VFD what is usually done is to flip the motor pulley so you are running the larger motor pulley to the larger headstock pulley (requires a BX27 belt). Then use the VFD with a speed range for general turning from 30-100Hz, and down to 20Hz for light turning. This gives you a single speed belt range from around 80-2000 RPM with no belt changes.
Insulation issues with VFD's is less of an issue with modern motors, as the insulation has gotten better. In addition dual voltage (non-inverter) motors say a 230/460V run at 230V is very unlikely to have any issue after years of use with a VFD. Issues of VFD induced insulation degradation and bearing erosions occurs with the higher voltages, longer cables and larger motors in 24/7 use environments. I would not worry about it with newer motors, older motors can have more issues so settings are more conservative. There are inverter/vector motors like what David runs on his 1340GT which can only be run with a VFD, they have full torque down to almost 0 RPM, and full Hp up to 6000 RPM with no issues. This requires using a smaller motor pulley and keeping the spindle speed to under 2000 RPM.
As far as speed pots anything from 1, 2 or 5K in a linear better quality pot, 1-5W will work just fine. They do sell some that fit into the 22mm hole, but quality is just OK. I prefer to use a mil-spec. type pot that are typically rated for millions of turns. It is one area where I have seen failure issues with cheaper/factory speed pots, the RPM will not stay stable either due to poor contact or contact bounce from vibration.