If you have ILR, the baby (provided he/she is born in UK) will be a British citizen, as the child of a "settled" parent. So there won't be any need to apply for him/her to be registered.
So far as I can see, you have two options for acquiring British citizenship yourself:
- 1 - The first is that you apply for naturalisation now. That, with luck, won't take more than a couple of months. Then, in February, when your wife has been here for three years, she will be able to put in a separate naturalisation application for herself, taking advantage of the fact that people married to a British citizen need to live in UK for only three years in order to qualify for naturalisation.
2 - The other alternative is that you and your wife both wait until February 2009 (when she reaches her fifth anniversary in the country), and then apply for naturalisation together. The advantage of this is that it saves a couple of hundred pounds. The disadvantages (of course) are that you will have spent about nine years here without naturalising, and your wife will have spent two years more without naturalising than would have been necessary if you had applied on your own.
The standard application fee is £268, and the "joint" application fee is £336, at the moment. When you're doing your calculations, you might like to bear in mind that none of us knows what the fees are going to be by the time 2009 comes around. My guess is ----- higher! So I doubt that you will be surprised to know that I think option one is the better option.
Guide and Form AN(NEW), and the Fees leaflet, can be downloaded from
this page on the IND website.