Thanks for the responses. I found a draft copy of the 2005 NEC (I have not purchased it yet, since we still are using the 99 code). I did find article 430-122 and it now refers to feeder/branch circuits.
I wish I knew their reasoning. In contrast we use minimum size 1 starters. They are good for 10 HP. The code does not require me to size for a 10 HP motor. I really do not see much difference with a VFD.
It appears that we end up wasting a lot of electrical resources by sizing this way. Looks like I get to submit a request for change for the 2008 code. Don't think it will do much good, none of my other ones have been successful but I can't complain if I don't at least try.
