It works with any special. The way it works is that while the projectile from the first S is in the air, and before it connects with the target(s), you N attack. The game uses the accuracy of the most recent input (N) to determine the hit chance of the S attack that hasn't connected yet.
So you got N2 accuracy on an S1 attack, which is a really dramatic increase in hit chance. Some nerd around here will give you the numbers I'm sure.
And for a special to work you have to first hit the target, then it has to activate. Each special has an activation rate. Hell also takes into account EDK whereas Demon's does not care about resistances.
Since the projectiles of needles move so quickly and their range is limited I don't think it's possible to use the glitch. It's most obvious on slicer-types, but it can also be done on ES cards, handguns, rifles, mechguns, and probably some other types I'm missing.