Uh... So far as I can think, you're in the clear with your change to UserParam. I'm pretty sure you need to write it all at once or you'll lose data. Err... Just saw the call to FlashErase.
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You'll definitely lose the data if you don't. I'll need to check with Paul/have weigh in on this to be certain.
As for why is there 128k available on the MOD5441X but SaveUserParam only allows for 8k usage? Well, it sits in the system library and the UserParam sector size is usually only 8k in size. The MOD5441X's flash happens to have a 128k sector instead.
In reality, based on this issue, it would make sense to move the UserParam stuff out of the system lib and into the platform libs (or add a platform variable which declares the sector size). Actually, I think you can do this by differencing between UserParamBase and AppFlashBase... brb...
-Dan