MSD-How are you guys hooking up your ON-OFF switched wire ?

The small red wire turns a relay on and off inside the MSD box. To use another relay to turn that relay on and off is adding another potential point of failure and reduced reliability with no benefit.

My recommendation would be to follow the MSD instructions and connect to the power wire to the coil from the ballast and then jumper out the ballast to eliminate a failure point (the MSD will work fine if you leave the ballast in).