The inspector will have explained exactly why you need to pay the VAT over and you can challenge that if you think they have made a mistake. VAT Notice 708/6 covers the areas that are eligible to be charged at the reduced rate and you should be able to see whether what you are doing fits in with the definitions in it. Para 2.5 is very clear - if what you're doing isn't covered by one of those areas then you need to charge 17.5%.
You don't need fancy software packages to work out what VAT to charge - just work out what VAT rate should apply to what you are doing after searching the HMRC site for special rules for certain types of supply and then calculate 17.5% on the standard stuff and whatever reduced rate applies to the other bits. If in doubt about what rate applies to certain types of work ring the HMRC helpline and ask them.
Cost of boiler and its installation 17.5% VAT
Cost of manual or electronic timers, thermostats, mechanical or electronic valves, including thermostatic radiator valves and their installation 5% VAT as per VAT Notice 708/6
You'll have to be able to work out the cost of the timers, valves etc separately to the cost of the boiler to be able to justify the separate rate to HMRC if they inspect. You might also have a problem if they argue that the timers, valves etc are merely incidental to the supply of teh boiler (covered in para 2.3).
Looking at the Vat Optimiser site it seems to charge a % of the VAT saved so if I were you I'd (at the very least) send them a bill for the same % on the VAT you've got to pay back to HMRC. Presumably you got the HMRC inspector to speak to them to find out how the system works and it didn't help ?