The two Chinese characters that begin Odaimoku are pronounced Na and Mu when they stand alone. The first character means "South" and the second character signifies a negation (as in "Does a dog have Buddha-Nature?" "MU!"). Those two characters were chosen by the Chinese to transliterate the Sanskrit word "Namah", they were not chosen for their meaning. In China the two characters are chanted as Namo (as in Namo Amito Fo). In Japan, they are pronounced Namu, unless it becomes convenient to drop the "u" sound, which happens when Odaimoku is chanted at a fast pace. So when writing the Odaimoku, it should always be written as "Namu" in order to acknowledge each Chinese character. There is no way to contract Namu into Nam' when writing Chinese characters or even when using the Japanese phonetic systems - the hiragana and katakana. Only in English can you write Nam' and leave out the "u."
This is important, because in the Nichiren tradition each character of the sutra is looked upon as a golden Buddha. Now it may be prefereable to chant "Namu," but chanting "Nam" is a linguistic matter and not a doctrinal issue.
As my sensei, the Ven. Ryusho Matsuda, and others have pointed out, the pronunciation of the Odaimoku was different in Nichiren's day anyway. According to Japanese linguists, the pronunciation of the Chinese characters has changed over time. This was actually discussed during Shingyo Dojo (the final training period for Nichiren Shu priests held at Mt. Minobu). So it is not as though we need to pronounce it exactly the way Nichiren did, because no one pronounces those characters the way he did anymore. Bottom line: the difference between Nam and Namu is a linguistic issue and not a doctrinal issue.
Namu Myoho Renge Kyo