All true, except generally, it only causes the computer to adjust the timing. The light can go out on your dash, if it stops, but the code is still there. Definately do not ignore it on a turbo unit.

The sensor senses a vibration in the range of about 6-8 cycles per second. Sometimes though, other vibrations on the engine can fool it. Course, the sensor can go bad and give false readings. Can test it by tapping on the engine near the sensor (not ON the sensor) at 6-8 cps and see if it triggers.

As stated before me, check vacuum lines, wiring to sensor, the sensor, the octane gas you been using. If it is really working, then might try to determine if your engine has carbon causing the "dieseling" and then deal with it.