We have a prospect that has a non safe harbor 401k plan with a 50% of first 6% match with about 50% participation. They became top heavy for the first time in 2002 and had to make a 3% to all nonkeys. This cost them an extra $15,000.

It appears we can change the plan in 2004 to be a SIMPLE 401k with 100% match of first 3% and avoid the top heavy rules. TRUE?? Is there any reason you can't change back later if they become non top heavy??

true, plan does not have to make top heavy contributions.
true can switch back to regular 401(k) at a later date. (this would have to be an option if plan ever had more than 100 participants.
must be calendar year plan.
there is a cap on deferrals which is less than the 12,000
match is 100% vested, slightly diffrenet formula than what you have now, etc.