John Harper: Now, about making NPCs.
Interesting obstacle NPCs I assume you mean no-name goons and such. That's the only kind of "obstacle" NPC that TSOY should have, IMO. Everyone else should have goals and some means to go after them. For goons, though, I just assign reasonable abilities and levels (Competent is usually about right for standard henchmen and stuff). If there's a lot of them, I roll them into one character, and give pool points for the extra guys. So, a "character" representing a squad of goons might have a Vigor pool of 3 or so.
The cool thing about the way bonus dice work in TSOY is that you can give pool points to goons like this, but it doesn't really make them more powerful, just more reliable. They'll still be capped at Competent (1) + roll (3) = 4, so an Adept or Master PC can still beat them if they care enough.
If the goons are elite or specially trained (a unit of special forces soldiers, maybe) then I would also give the group-character some secrets to make them nasty (like Synergy, Specialization, or Enchancement). Throw in an ability like Battle so they can link rolls for bonus dice and you have a pretty darn wicked gang of badness.
Rivals and "Bosses" I'm putting these together because for TSOY, they're really the same thing: named NP Cs with goals and interests of their own. Their specific "power level" is important, but of equal or greater importance are their goals and the things they are willing to do to achieve them.
That said, here's my current way of generating tough NPC opponents:
Just eyeball their abilities. Just like the book suggests. Are they a Master duelist? Adept at deceit? There ya go. Remember that NPCs don't transcend, so you can totally get away with a Grandmaster ability if the NPC warrants it. (I have an NPC in my TSOY game now that was introduced by a PC and described as "the scariest [bounty hunter] ever." So, bam -- Grandmaster hunter.)
Assign pool points and Secrets. My players keep track of how many advances they have spent on their characters since play began, so this part is easy for me. For a really, really nasty NPC, spend roughly the same number of advances as your most-advanced PC on Secrets and pool points for your NPC. Generally keep NPC pools between 3-6, unless they are supposed to be some awful legendary godling or something.
So, my most-advanced PC has spent 23 advances on his character so far (including the 6 at character creation). So I spent 24 advances on my really nasty bounty hunter. 15 on pool points (6 Vigor, 5 Instinct, 4 Reason). 8 on Secrets. Yes, 8 Secrets. Stuff like Synergy, Enhancement, Specialty, Mighty Blow, Imbue, etc. She is sooooo badass. In play, she is more than a handful for the most powerful PC, and the group really has to work together to oppose her (which they haven't managed to do yet, since she's built for stealthy hit-and-run tactics, heh).
The awesomness of the badass NPC in TSOY is that I can't just hose a PC at my whim. The system won't let me. No initiating BDTP for me, and without BDTP, I can't "take out" a PC. I can harass and hurt the PCs with her, though -- tempting them into BDTP. And her awesomeness drives everyone to hit their Keys even harder, to collect the advances they need to stand up to her.
For NP Cs that aren't meant to fight all the PCs at once, you should spend roughly half the number of your best PC's advances on pool points and Secrets, maybe a little less. So, a significant rival NPC in my game might have around 10 advances in pools and secrets, and possibly an ability or two at Master.
NPC Keys Finally, here's a fun thing that I'm adopting for my game. The book doesn't mention it, but I'm giving my NPCs Keys of their own once they are introduced in play. This lets them earn XP and advance, too. They get far fewer opportunities to hit Keys, though, so the PCs will still advance more quickly -- as it should be. This technique of introducing an NPC (as built by rough eyeballing) and then advancing them using the standard PC advancement system is something that I've been doing in my Nine Worlds game (based on Matt's excellent advice) and it's really working well.
Also, it's very cool to say "This NPC is totally taking the Key of Love for you right now."