I don't know that I have ever had any information from the NCMA on observations, so can't help there. The only info I think I've ever read is to do with us making observations of our minded children (for my ECP assignment).
My co-ordinator said she was observing me in relation to how I could ensure that all the needs of all the children I was minding at the time could be met. As I said, our co-ordinator is lovely, but I did feel a bit odd about it!
She sat next to me at the toddler group and, as usual with small children, there were plenty of interruptions. She talked to me normally, as she always does, asked me questions (as usual) but when she showed me her written report, she had recorded things about how I dealt with two 16month olds wanting to sit on my lap at the same time ... and then the 23month old who trotted over for a cuddle too!! She also made comments about us all sitting at a craft table, and other children wanting to be involved; ensuring that they all had drinks; making sure that they were, basically, happy bunnies!! She certainly didn't follow me around.
It was also the school holidays, so I had a 5 year old and an 8 year old with special needs with me. It was stressful, but not in a really negative way. It's not something I have ever had experience of before.
I have other minding friends who have had observations done in their home - such as seeing them organise a craft activity, organising lunch etc.
I assume that most observations run along the same way. Our co-ordinator has got to know the names of our mindees and, although they don't necessarily remember her, she makes herself part of whatever they are doing and always chats and interacts with them.
I think you just have to do what you usually do (or perhaps should do!!!) - they are not there to catch us out like Ofsted inspectors!!
Gosh, that was a ramble.