Neidan is a traditional practice of Taoist deep meditation. Like all deep meditative practice, Neidan's ulterior aim is total personality transformation, in the terminology of our modern psychology. As you can appreciate, the only meaningful approach is to use modern psychological concepts, for spiritual analysis. Having said that, Neidan is a special kind of personality change. It is a personality change together with physical change at the same time.
First issue: What is attractive or puzzling about Neidan is that its purported objective is immortality. Practitioners and academicians alike have been pondering about what is the meaning of Immortality. Although most practitioners and academicians believe that it does not mean physical immortality, there are still a handful of "spiritual leaders" who still believe that it means real physical immortality. Rumor among some "faithfuls" has been that Lu DongBin (the most famous Neidan grandmaster) was "discovered" or "seen" in real person in Taiwan some years ago!
Under Jungian psychological concepts, when a spiritual person has trained, or elevated, himself up to a level completely above human consciousness, he has full empirical justification in claiming himself as "above human" (Jung considered Jesus as God in this sense in psychological analysis, which of course does not exclude, nor postulate, any metaphysical truth, i.e. Jesus is or is not God). In the terminology of Neiden, this level of consciousness is called Immortal. Having no good term to describe, Taoist practitioners call it Tao.
Second issue: What is the training process? The definitive training manual available in the West is the translated work "Taoist Yoga" translated by Zen master Charles Luk. The author of the book is famous Taoist master Zhao Bichen. The approach of the text is similar to most Neidan texts, it presupposed the guidance of a master and presupposed prior physical training. Zhao himself was prominent martial artist (though that does not mean martial art is a pre-requisite), and in his other book on the subject (not yet translated into English), he did mention some physical exercises, as exercise for health and preliminary workout for Neidan. These exercises are rather rudimentary (because of its objectives and intended readers) when compared with various Neigong or chi kung exercises, and hence not highly regarded in the Neidan circle.
What made the issue a little more complicated for contemporary readers or intended practitioners is that Neidan texts are highly complex texts (one of the reasons is that they talked about internal experiences that are felt physically rather than can be explained easily rationally). Because of this complexity nature, most people interested in the texts are more academically inclined than practically inclined. Even in Hong Kong, most serious tai chi practitioners do not talk about or try to understand Neidan. With a sedentary lifestyle, many of those who are interested in Neidan couldn't get a hold of the subject matter, and always in search of a better text but can never find one! To make matter worse, a method mentioned in Taoist yoga involved stimulating our sexual energy which in Charles Luk's translation (wrongly) referred to as masturbation.
My recommendation: a proper approach to Neidan is to start with Taoist energy building exercise of tai chi or chi kung. The second step will be some form of power breathing training (as available, for example, in professional singing, woodwind instrument, yogi pranayama and tai chi nei kung). After these ground works, one will be in a more solid foundation to approach the subject of deep Taoist meditation of Neidan. As to which level of personality transformation one is looking for, it will depend on each person's own choice. No where in Neidan texts said one must go to the limit of total personality change (i.e. become Immortal). As Master Zhao wrote in his Taoist Yoga, he had not reached the highest level nor did he intend to. As to the question "what minimum level a student must achieve" is, in my opinion, quite irrelevant to most, if not all, modern men. In Neidan, it is always the negation of the highest the better.