As previously discussed, the catchall function of this howto needs work..
I came across another howto that provides a more robust method for the nginx conf files.. This one includes failover for all virtual hosts to the apache server, ie it will keep working even if there is no viritual host created in nginx.
I don't have a lot of virtual hosts to worry about.. I have implemented these suggested conf files on my server and it is working quite nice. I will continue to tweak and report back..