cpjcoe,
I am happy to continue an impartial technical discussion on the subject of the basic principles of doing fatigue analysis of welds.
As we respect the forum's protocol I dont feel it is appropriate to discuss the relative merits or approaches of one fatigue analysis software product...
You guessed right.
If you want to correlate test and CAE it is still useful to compare the local stress response (in FE) with that from some strain gauges in front of the weld. (static is easier to start with).
If you are getting the right stress/strains, then you stand a good chance of...
The strain life method assumes a homogeneous material and a weld is not homogeneous.
Fatigue of welds is generally dominated by crack growth - starting from small cracks, or possibly visible ones.
SN curves of welds (such as BS7608, or component specific ones) are essentially component SN...
This is a pretty good paper giving a conceptual introduction to fatigue:
http://www.e-i-s.org.uk/A%20Practical%20Introduction%20to%20Fatigue%20v1.pdf
I can also send you a 80 odd page fatigue theory handbook we have thats quite useful.