Hey taffy...the sand is crushed coral and it is between 1.5 and 2 in deep in most places...they dont seem to bury the shells, just move them around some...they do dig in and around the rockwork, but I was prepared for that and it is all glued together (no crushed simili for me)...I am running a Penguin Bio-Wheel Mini, which seems to be doing a fine job...
as for the T. vittatus, they are listed in my books as shell dwellers whose habitat is rocky areas...so it is probably a combination of the two, most likely they are classified as "shell dwellers" because of their habit of hiding in small areas...I have found that my similis (also listed as cave dwellers) spend more time in the rocks than in the shells...do you have any rocky caves for them to hang out in? that might help with the ocellatus/vittatus rivalry, each fish (at least each male) will want to establish his own territory...it may be a matter of letting them duke it out a little and seeing who wins...