dave,
with respect to the signals, i have connected the analogue signal from the voltage divider to pins 44,45,46, so that i can get more readings to average the reading from, these are read into the brain using modbus addresses 124,125 and 126 i think, these will give values between 0 and 1035 depending on the voltage of the signal from the voltage divider, 3.3v being 1035 and 0v being 0.
as far as the height sensing goes yes you could use that system, i think some comercial systems use it and its known as ohmic initial height sensing, do a search for it, i know some people slag it off and say it doesnt work if you plate is even a little dirty, i have no experience so i cant comment, also consider if having a wire connected to the plate to sense with is a good idea when you let it have tens of amps and hundreds of volts when you are cutting, sure there is a way round that with a bit of thought.
matt