Remove R3 and replace with a 1K linear potentiometer. Play around with that. I don't know for sure, but since you substituted on the sensor, it might require a slightly different voltage.

Maybe you want to inline a 50 ohm resistor though. You might damage your sensor if you have a direct connection.

Have you put a scope of DMM across pins 1 or 2 of the sensor to verify it is detecting motion?

EDIT: I've just reviews the specifications for the OPTEK device. Are these guys SURE this works???

The device looks more like a go/no-go type of device. It says it switches whenever a reflective object passes in front of it. I see nothing about how to adjust sensitivity. It doesn't seem sensitive enough to detect the subtle changes in reflection that would occur during REM.

All the 100 ohm resistor does is to provice a voltage drop so you don't fry the LED in the device.