As you state, Valdes/Tarjan/Lawler is a recognition algorithm.
There has been a stream of work on actually finding modular decompositions. The recent work of Fabien de Montgolfier (with collaborators) is pretty definitive; they have also produced a C implementation. I did a Perl implementation of an older algorithm, and Nathann Cohen is currently working to incorporate de Montgolfier's code into the Sage framework (it looks like it should appear in version 4.5.2, due early August 2010).