> Is this the correct way to code for categorical variables of no-interest that have more than two levels in 3dttest++?
It looks fine if you assume there are no interactions among all the explanatory variables.
> is there a significant difference in the interpretation of the results when coding using 1/-1 versus 0.5/-0.5?
The only difference is: with 1/-1 coding, the variable is associated with half of the group difference (i.e., (A - B) / 2) while with 0.5/-0.5 coding, the variable is associated with the group difference (i.e., A - B).
Gang