Pay Per Last N Shares might encurage miners to continueously mine, but it will also drive away part time miners.
One of the reasons Eligius is popular is because it offers free PPS rewards. This is atractive for its low variance, but also to part time miners, and as a backup pool, and for pool hoppers to come to on long blocks as a fallback pool. Switching to PPLNS could drive away all of those users, and their hashing power.
Part time miners is the reason why I won't go N < diff*2. That is 86% CDF... maybe not enough.
I'm adding a new option: Pay Per Last Limit-N Shares. PPLLNS differs from PPLNS in that when the difficulty changes upward, N gradually increases as shares arrive, and older shares are
not "reinstated" into the N. So if the difficulty goes from 100 to 200, the first share at the new difficulty will be at N=101, the next at N=102, until N reaches 200. This new option will be available for voting with N=diff*8. This gives 99.96% CDF (probability of finding a block). This means when you submit a share, it will be paid a 8 times less than PPS, 8 times more often on average.