As far as I know damage slotting works. I expect you are thinking of them not benefiting from damage buffs, like Build Up.
I really should do something about this signature.
I can confirm that slotting the Little twits of DOOM (tm) for damage works.
And as Praf says, they're completely unaffected by external damage buffs such as Build Up and Set Bonuses.
I've recently got my Photon Seekers, and am loving them, even unslotted, however, i've heard that slotting them for damage dosn't do anything, is this true? Thanks for replies.