How many balls you use depends on which spur gear you are using. If Kimbrough, then yes you will use 12 balls. The kit comes with Du-Mor gears and they still use 8 balls even in the outer holes.

The reason using the outer holes is better, is that it gives the balls much more mechanical advantage. Moving the balls out in the gear makes them grab the rings better even with less tension on the diff nut. This in turn - A) makes the diff last longer, and B) makes the diff spin smoother and freer.

The small ring diff works very well too. As stormperson said, If you are happy with your current set up, then don't worry about it. Spending $45.00 to "fix" something you are happy with, may not be worth it. On the other hand, if you decide to get the large ring diff, I'm certain that you won't be disappointed.

john