Technical name for a manual food processor

Look for a strong motor and thick blades. If the blades are thin, they're likely to warp over time. The motor needs to be able to spin those blades through the liquid.

Look for a thick glass container. The plastic ones are unlikely to deal with the heat of things like soups and sauces being dumped in.

Check the gasket between the glass container and the piece that attaches the blades. A thin, flimsy gasket is likely to start leaking before a thicker, softer gasket.

Look at the number of teeth on the connection from the motor to the blade. The more teeth, the greater the surface area being used to distribute the power to the blade mechanism and is less likely to wear out.

Overall, as with many things, one of the quickest ways to tell a good one is to weigh them both. The heavier item is better. No one pays for shipping extra weight unless it's there for a good reason.

(note that the "heavier" rule doesn't apply to electronics like cellphones/computers, etc. where the cost of making it small is actually higher)

I have used the exact same procedure that you describe on a number of occasions, and the result has always been a thick butter-like consistency, and I think that this is pretty much unavoidable when using a food processor. Maybe you can get a thinner consistency if you use the whole egg like ElendilTheTall suggested.

Anyway, since the sauce never emulsified, I think you have been pouring in your butter too quickly. It is important to just add a few drops at a time until the sauce has started emulsifying. After that you can go faster, but it should still only be a thin stream.

Also, something that I have noticed is that when using a food processor with only a small amount of egg yolks (or any ingredient, for that matter) is that the rotating knives will actually rotate above the ingredients and not actually mix them. When making hollandaise/mayonnaise, that will be fatal since you will just be pouring butter on top of a thin layer of egg yolks. So you might want to check your food processor and see if it works similar to mine.

While I realise that you use this recipe because it is easier than making hollandaise by hand in a bain-marie, I would suggest that you at least try making it "for real" once before settling on this method. The consistency is so much nicer. I think the flavour is better too but that may only be my imagination.