No I'm pretty it sure works. When Boomer comes to ask him, her test comes up as red and it even shows the screen. But he changes it to green and tells her she isn't one. After that I think he just arbitrarily "passes" people regardless of the result.
Maybe he is a bad guy or maybe he wants to unveil all the Cylons at once. I mean if he reveals one person to be a Cylon, the others will know his test works and then might come after him. So it may be safer to wait until all the testing is done.
This argument doesn't really work though, because in that same episode he is telling Number Six that each test will take 11 hours and to do all the blood samples will take 60 years. So basically I'm not sure what his deal is, but the test does seem to work. Therefore he must know whether Ellen is a Cylon for real, even though he just tells everyone that they pass.
I was going to find the episode where he tests Boomer but the BSG wiki I use is hanging. It may be in Season 1 Episode 9 - Tigh Me Up, Tigh Me Down. In any case that is for sure the one where he "passes" Ellen and basically states to Number Six that it is easier if everyone "passes" for now.
Oh and I should point out something just in case there is some confusion. There are two "Cylon detectors" mentioned thus far into the show. The first was during the mini series and it was completely made up. Though he still managed to discover Aaron Doral was a Cylon, though he claimed it was because of the test.
Later he even admits to Adama that he does not have a working detector. At which point he asks for plutonium to create a real one. This is the one that I am talking about now that seems to work. I just wanted to be clear because I know you missed some of the earlier episodes so I thought maybe you were working off the fake detector assumption from the mini series.
Anyway...I'm a nerd.