Ive been thinking of installing that mod. The damage numbers seem to be highly unrealistic to me. In my current game my character uses small arms exclusively. Its really fricken annoying when I unload a burst from the combat shotgun (3 shots) and do LESS damage than Tycho who I armed with a BB gun! There is just no comparison, I did 23 and he did 50. Without crits and on the same target. And no I didn't miss.
Currently I have a big stack of other mods on this install. The NPCmod 3.4, The high res patch, the 1.3.4 fan patch and Timeslip's engine tweaks and the update mod 1.2.5.
Would the fatal damage mod affect any of these? Or would it simply overwrite all the relevant files with the proffered updated values?

I'm not sure, but as with any damage mod, I'm certain the same values apply to your NPC and I would not dare risk higher damage values to my NPC w/o higher HP.
but otherwise, I believe it would work appropriately. you can always test it by backing up your existing directory someplace else.