When I did my IR test I had the GNS430 switched to config page and flew the trip using steam guages and dead reckoning to the beacon and the used the ADF inside the promulgumated distance. After the test the examiner asked my why I did not just punch in a DCT to the beacon and use the GPS......
You still have to use the ADF in raw data mode as with the other instruments but if the other kit is installed and cetified for use you can use it.
You are right seeting the OBS on an NDB is indeed more accurate and you would be surprised just how many of us fly our approaches this way!!