I am not familiar with Pro Design but, if it is a private label version of FlexiSign, then is most likely will perform an autotrace of black and white, grayscale or color images. So, no, I am not saying that you must always be in a black an white color mode.
What I am saying is that you will, because of the need to posterize, get widely differing results at different levels of posterizing. This is where you, as the creative control, must exercise your judgment. In addition, you will also want to match what the software presents you with in an automated routine such as posterization or autotracing with what you and your client want in the finished graphic as well as how many colors the budget for the production will support. If, for example, you want to take a full color image and produce it in just two colors of vinyl, then you will not want to posterize to a level of six colors. You will have more colors than you have a budget to produce the job.
Often, in this area, we have seen unrealistic expectations as to what the "state of the art" actually is for modifying unsuitable artwork into usable vinyl-cut-ready artwork. The fact is there are no pat answers. Each image and each job presents a different challenge in how to get from where you are to where you want to be. That is where talent, experience and artistic judgment come into play.
From a different perspective, today's thermal and solvent printers are experiencing great success because of the fact that they reduce or eliminate the need to deal with these issues in many situations and for many people.