Yep, your boss doesn't know what he's talking about. The user wouldn't know any difference whether you used Modbus or another method which would probably be using a data acquisition card to output voltages to the control inputs on the device's control board.
API is Application Programming Interface.
Your VFD would be a slave device, so in order to control it, you need to create a Modbus Master on your PC. So look at the Master example. You basically write a command and read back a response. The library VI formats the command and interprets the response for you.
So if you want to read the current in the drive, you read that register. Probably is a Read Holding Register function. If you want to change the frequency, you would Write Holding Register sending a value to that frequency registers. You can start and stop the drive. But make sure you understand how the drive works, even if you were using old fashioned speed pot and push button mode. You may have to hard wire in some control wires. (Definitely make sure you have a hard-wired E-Stop button so you can hit it and shut the drive down in the event that you lose control of it through software.) There may be some registers you have to set in the drive to enable Modbus commands and the ability to start and control the drive through software.
You should also look at http://www.modbus.org/tech.php
Start small and just use the Modbus Master example to do something simple to read a single register.
