I like the Idea to change targeting mode but not the way it's been implemented.
The fact that you change mode using up and down on the controller's D-pad or arrow keys is very confusing for veteran FF XI player since we are used to press up/down to select party member.
With this new target system, someone used to play XI would select a healing spell then press up or down to select party member but end up on enemy only targeting... you get the idea...
I think that the targeting arrow key/ D-pad should still target anything from the targeting mode when pressing right or left, and target party/alliance member when pressing up down. The button you press to change targeting mode should be something else, like pressing R3 (pressing R3 atm put you in 1st person mode, that could become L1+R3 )

That being said, I also want the FFXI targeting system back and maybe merged with this new one... in XI when you were selecting a buff/healing ability it would only let you target party member and when selecting an agressive action it would only let you target enemy.
The /assist "<t><st><stnpc><stpc>" is also a must.
/target "<t><st><stnpc><stpc>" or /action "action name" "<t><st><stnpc><stpc>" would also be very useful...

Please ! make haste before we get used to the new ineffective system so we don't have to relearn to target again when its done !