Wallace's samatha practice, based on Padmasambhava: Am I doing it right?
I am combining awareness (mindfulness of my thoughts with introspection) with mindfulness of the duration of in/out breaths. 


This is right. Anapanasati Sutta mentions about discerning long or short breaths as the 2nd step in the 1st triad.


  When thoughts arise, they are mindfully observed, but not viewed as an interruption of mindfulness of breathing.


Realising that thoughts arisen itself sometimes bring you mind back. If not 1st be aware of the through and breath. Then look for any sensation that the thoughts might have brought, e.g. discomfort if they were angry thoughts. Finally actively redirect you mind to the chosen object.


  When no thoughts are in mind, focus shifts to the mindfulness of breathing.


Initially you have to keep brining back you mind to the breath even if it does not wander away.


  Mindfulness of breathing seems like a place-holder for attention when no thoughts are in mind.


This is how some meditation master teach this, but thinking and pondering is verbal fabrication which need also be calmed. [Samma,ditthi Sutta]

Also the following might be of interest: Anapanasati: Mindfulness with Breathing - Unveiling the Secrets of Life by Ven Buddhadasa Bhikkhu