Background
I am 44yo with 42yo wife and 17yo son (birthday 22 May 1991). We are all Australian citizens (Australian passports)
I obtained a UK Ancestry visa on 11 Jun 2004, with dependent visas for my wife and son. We arrived in the UK on 14 Aug, 2004 and have resided here since. My wife is a teacher, I have a job with a government authority and my son has been at high school continuously.
On 9 Jun 2008 I applied to extend our visas using FLR(O) and we have been given another 5 years.
Just before 14 Aug next year (2009) we plan to apply for ILR using SET(O) - this will cover me and my wife as a dependent, but my son will have turned 18 on 22 May 2009 so will have to apply in his own right.
He will also be finishing his A-Levels in June 2009 and so is looking at options for University, gap years etc etc. At time of our ILR application (late July), he will most likely have just finished school a few weeks before, and will either be searching for or have just started a job (of the holiday-job or gap-year variety)
Some Questions (finally

1. My son will have five years of continuous residency, but only as my dependent. Is he eligible to apply for ILR? A no here will pretty much ender any following questions moot.
2. If eligible, which form should he use to apply for ILR? I can't see an obvious match.
3. Will his formal employment status at time of application make a difference? Would it be better if he didn't have any kind of job so he was still unarguably a dependent? Would a university offer make any difference?
4. I'm assuming that if he was to take up a university place at 1 Sept and had been granted ILR in late July/early Aug, he would be eligible for "home fee status". This seems fairly clear from multiple university websites.
5. Finally, should we all travel to the PEO and submit both applications for processing together, or will my son's application be handled entirely separately?
Thanks for any assistance anyone can give us. My son is, understandably, in the throes of making some major life decisions and some real guidance would be appreciated.
Rob