That appears to be a digital sensor - the output is either HIGH or LOW. That should be input to a digital pin.
As a digital input it works perfectly and as analog it seems to go between 0 and 1000.
I wouldn't expect anything but ~0 and ~1023.
but I still want to be sure I'm doing it right.
When connecting to a digital pin, yes. When connecting to an analog pin, no. It's like trying to determine the degree of pregnancy. You either are or you aren't. You can't be a little bit pregnant.
I'm using a 100kohm resistor to pull down to ground
A 20k would be better.
and a 10kohm resistor to connect to the arduino inputs.
Why? Something wrong with a simple wire?