As you say, in order to do a FMS approach, you need GPS as a back up for when radio nav. is not available. GPS is available almost all the time - Do you get a warning if GPS is not providing accurate data - must you then discontinue the approach if you are down to 'IRS Nav Only'?
You are right, it does (usually) require constant changing of heading (as it would were you flying manually). However, we do still have a track line which makes it a hell of a lot easier - stick the track line on the EHSI on the head/tail of the beacon, over the inbound course line, and it should fly a perfect NDB!
I don't know if the GPS option exists - probably on the 737NG. Our company Airbus have it.