All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.
The Hadeeth which you referred to was narrated by Ubayy who said: “I said: "O Messenger of Allaah, I send much blessings upon you. What proportion of my prayer should I devote to you?" He said, "As much as you wish." I said, "A quarter?" He said, "As much as you wish, and if you increased it, then this would be better for you." I said, "Then a half?" He said, "As much as you wish, and if you increased it, then this would be better for you.” I said, "Then two thirds?" He said, "As much as you wish, and if you increased it, then this would be better for you." I said, "I'll devote all of my prayers to sending blessings upon you." Thereupon the Prophet said: “In that case, it will suffice you from your worries and your sins will be forgiven." [Ahmad and At-Tirmithi who classified it as Hasan (good)]
Also, in Tuhfatul Al-Ahwathi, reported by Ahmad and Al-Haakim who classified it as Saheeh (sound), and in a narration by Ahmad that Ubayy said: A man said: “O Messenger of Allaah, what do you think if I reserve all my prayers to you? He said: If you do so, Allaah Almighty will suffice you your worries of this worldly life and the Hereafter." Al-Munthiri said: "Its chain of narrators is good.” Al-Qaari said: “There are many narrations of the same Hadeeth, and in a narration he [the narrator] said: "I pray by night" instead of saying "I send much blessings upon you"; so his saying ‘What proportion of my prayer should I devote to you’; means: instead of my prayer by night.”
As regards the meaning of the words: (What proportion of my prayer should I devote to you?), i.e. instead of my supplication that I supplicate for myself; this is what Al-Qaari said. Al-Munthiri said in At-Targheeb: "This means: I make a lot of supplication; how much supplications should I reserve to you from my supplications, (he said: as much as you wish), meaning you may allocate any proportion that you wish, and his saying: (I said I will reserve all my supplications for you), meaning I will devote my supplications to you all the time that I used to supplicate for myself; (he said: in this case, it will suffice you from your worries) the worries is whatever a person needs in this worldly life and the Hereafter; meaning if you devote all the time of your supplications in sending blessings upon me, you will be given your aspirations of this worldly life and of the Hereafter.” [Excerpted from Tuhfatul Al-Ahwathi]
So, this Companion wanted to devote the time that he used to supplicate for himself for sending blessings upon the Prophet . The Fatwa of the Permanent Committee reads: “The Hadeeth does not negate that a person supplicates his Lord and asks Him all his needs with legitimate supplications, and sends as much prayers on the Prophet as possible; so one should do both.”
Allaah Knows best.