Sounds like you are getting there. And if you are working directly on values, then I'd think any "system" that works on artificial consequences can undermine the core values you really want to impart.

Hardest thing we find (and even my Mom mentioned this recently), it is really difficult to realize just how young 7 is. She said: You get talking with DS and suddenly your mind thinks he is much, much older and then when he acts his age or has his feelings hurt or does something impulsive it seems so out of place.

I'm always amused by the "Marshmallow experiment." http://en.wikipedia.org/wiki/Stanford_marshmallow_experiment
These kids can't wait 15 minutes to get double the reward?