So far, KDZ has done nothing for me except for brick two phones. I've followed your instructions implicitly and they ultimately failed, resulting in a phone that would not turn on. About six months ago, when I first got an Optimus, I had attempted to install Clockwork Mod using Rom Manager, and the result was a phone that would only boot into recovery mode with the three button combo, else it would just end up in an eternal boot loop.
Someone on another forum recommended using KDZ to flash the official firmware (V10C I think at the time) and the result back then was the same. KDZ crashed halfway through the process and the phone would no longer turn on.
I've read conflicting information on this, stating that KDZ will only work on Windows XP 32 bit w/ service pack 3 (which I had at the time I attempted to flash six months ago) and that it should run on any version of Windows. I was running KDZ from Windows 7 Ultimate 64 bit this last time.
All in all, I would not recommend KDZ to anyone except someone who has already bricked their phone and is just using it as a last ditch effort to regain functionality. Worst case scenario, it should **** the phone up enough that your cell phone provider won't be able to figure out what you did to the phone. That's what I'm hoping, otherwise T-mobile will be tacking an extra $300 onto my phone bill next month.