To me it looks too gimmicky and to be absolutely and brutally honest, amateur - like something my 10 year old would add to her site because it is brightly coloured and moves.
My kids have responded incredibly well to it but they have no concept of time and their reading skills are not great. I think you would have success if you targeted sites with a lot of kids on them. have you tried approaching the BBC for the CBBC site? Imagine having Blue Peter presenters talking to you like that - brilliant.
When I surf I want to get straight to the chase and not wait to be told information. I don't want any animation and with first fold space at such a premium I think it is wasted on a site pal.
Another thing, (while I'm giving you some savage feedback) there are quite a few site pals out there and although I understand they are customised, in actual fact they all have the same look and feel. They don't look intergrated with the sites they are on and the prominent SitePal link gives it away. It is this fact that makes them more like gimmicky add-ons than actually helpful salespeople.
I honestly think there must be a place for site pal but I wonder if you go back to your UK research you won't find that it is kids that respond better to this product and therefore it may be worth your while talking to sites like
http://www.swapitshop.co.uk
beano online
girl guides/brownies/cubs/scouts
cartoon network
bbc.co.uk/cbbc or radio1 even - they like gimmicks.
If people are telling you it is too gimmicky maybe you should use that as research as sell it as a gimmick!
Good luck, Tony, you'll get there in the end. (One last cynical thought maybe US Site Pal people are not being honest with you as to the success of it over there)