H-FIELD

Is it true that the engine will never go into closed loop operation if the MIL is not hooked up or not working? are there any other side effects of not have this hooked up? I did my swap into my jeep with an 2000 ls1 5.7 and have not got this hooked up and was told by the wiring harness manufacturer I used that this can make the engine run strange not having the MIL hooked up? and it it true the PCM will not read the O2 sensors till it has been running for awhile?

The reason I ask is that about half of the time the engine runs really strong and the other half it acts like the pcm is derating the power like its cutting the engine back and not running as strong as it will another time? I know I need to get the MIL hooked up and will do so as soon as I get a light to use in the dash and the only fault code is for the MIL circuit and the VSS which I cannot seem to get working and have tried two different sensors that I was told would work but have not and I have tried to program the pcm to see the amopunt of pulses form these sensors and still don't work. is the VSS absolutely need to make the engine run right?