Each controller will be a little different. Generally, one argument against grounding the negative lead of the motor is that it's usually "better" to use the control side of the device rather than just shunting power... the switch has to be big enough handle the full amperage load of the motor if you do it that way. Not many momentary switches are rated that high.
Zip, the wiring schematic you posted could be a problem, while it would be fine when the motor was in "fwd" mode, I think when you were in reverse mode you would them be shorting the positive side straight to ground. You would have to tap in to the ground wire after the controller but before the Fwd/Rev switch. (That's just with a quick look, I haven't fully figured out the whole circuit or anything.) Assuming whatever controller you are using works by PWM controlling the ground connection that would work if you can find a big enough switch that's suitable.
McRipper, one thing I figured out on my controller was that you couldn't just put power to the wiper because when the wiper was all the way down (electrically close to GND) when you applied the positive voltage you were essentially shorting through the pot. That was why I went with disconnecting the ground... the wiper gets pulled "high" because there's no ground connected to oppose the positive voltage. there's also no risk of shorting the controller out that way.
Keep at it, whatever it is it's not a waste of time. I'm sure if nothing else you are learning tons! Do you have a circuit diagram for the 555 device you are using? I may be able to help more if I knew how the controller was set up.