For example, I have a pre-ban Calico M-950 pistol.  It has a handguard on it that could qualify as a forward grip right?  I want to add a vertical grip to this handguard but have been told that this would make the pistol an AOW.  What gives?  I can still hold the pistol using the current handguard so why would adding the same thing only making it vertical make it an NFA weapon?  Is the person who told me this wrong?  Thanks for the help.

Go to www.atf.gov/pub/fire-explo_pub/gca.htm and scroll down to the Definitions section where there are legal definitions for each type of weapon.

In order to be legally considered a handgun it has to be "designed to be held and fired by the use of a single hand" and two pistol grips = two hands so it clearly isn't a handgun.  Without a buttstock is isn't a rifle because those must be "intended to be fired from the shoulder".  It obvisouly isn't a shotgun or a machinegun.  It doesn't qualify as a destructive device.  

Thus we come to the Any Other Weapon designation.

In short, vertical foregrips on hand guns is a big no-no.