Here's a partial break down of how visual effects work in NWN2.

The .pfx is the particle that is emitted by the particle mesh. When applied as the definition file for the mesh, it is emitted randomly over the surface of the target of the effect or at least where you define the mesh to emanate from. That is defined in "Model Parts". Remember to save these files if you make any adjustments to them.
If your visual effect is not actually going to use the mesh emitter on a target, the target can remain invalid. The target is defined in the model effect as well as the hand that the weapon goes in. You can test the effect by playing it in the visual effect editor.

In the SEFToPlayOnModel, the change alpha makes the model invisible, but not the particle effect. Using tag based scripting with on On Equipped script, you can also apply and remove visual effects on items as they are equipped by players.