What I'm trying to understand is if mx-bb "uses integrated features it works without touching phpBB", why would it conflict?
mxBB relies on phpBB code... if MODs alter the code that mxBB relies on, there are obviously going to be errors.
In Cash MOD's case, it's because the mxBB ACP doesn't like Cash MOD's admin_cash.php file, which basically includes all of the other Cash MOD files. The fix was to forget about admin_cash.php, and make each individual Cash MOD admin file include itself. Not as flexible as before (ie customizing which menus will appear), but everything works.
If a board is already using cash mod and users already earned points, what would happen if the cash_*.php files are deleted as instructed? Will it cause major problems?
All data is stored in the DB, not the Cash MOD files. As I said before, replacing the admin
Cash MOD files wouldn't affect anything other than allowing you to administer your portal/CMS. In any case, backup your database anyway.
Are there other mod issues I should be aware of?
Nope. You should read around a bit of the docs at mxBB though.
Please, post at the mxBB site for more info.