I am glad it does a good job for you
Currently, I experience the same type of noise like you do, lots of horizontal lines at the waterfall, in fact more of them. The internal noise blanker of my rig can usually cope with the audible noise (inducing the typical distortion on high level signals), but it cannot clean the waterfall (since it works in the IF only). The NR-1 is a saver in this case and cleans the whole waterfall spectrum without distortion. Actually, I have shot a video of this action here
https://www.youtube.com/watch?v=bkbPVVcN6i8&list=PL0KwxiKZqJ1TzQpscf3voh5CR1c30WLD_Thanks so much for posting the screenshots, these are valuable. I find it much easier to tune it using the waterfall, as I can see the whole band and I can notice (by switching on/off) any IMD produced in the whole band, so that I can back up the gain a bit. In my situation, I keep the balance close to 90% all the time and the gain control at around 20% or so. Then I play around with the output to bring the band background noise to the levels that it normally has without the pulsating noise (I notice the color of the waterfall in between the noise pulses). If it intermodulates, I back up the gain control just a tiny bit, or I turn the IMD clockwise. In the higher bands, the IMD and the gain can be turned clockwise and in the lower anti-clockwise. In the lower bands in the mornings, where DX signals are usually not present, I can turn the gain more clockwise and the IMD more anti-clockwise than in the evenings.
The exact settings depend on your noise levels and type, but this is generally how I set mine. I guess you have seen the newer youtube videos of my tests on the NR-1.
I am working on a modification that has steeper preselection to avoid even more the IMD, thus allow lower noise levels to be attacked. As soon as I finish, I will post this modification to the website. It is something that you can apply easily if you are interested in that. I will let you know.