Retention of rights clarification/registration of children

Hi,
I recently retained my rights to residency under the EEA laws regulation 10. I was granted 5 years more by the HO. However, the accompanying letter states that i now have a right of permanent residence in the uk. It further states that any children born to me in the uk can now be registered as British Citizens. I have 2 children born to me, not by my ex. One is 3+, the other is 10 months. I am a little confused about my true status. I got married in June 2008, (when i became a family member of an EEA national). I was first granted my initial 5 years in November 2009. That first 5 years will end in November 2014. The divorce was made final in 2013.
Do i qualify for permanent residence or naturalisation based on the fact that i first became a EEA family member almost 6 years ago?

I am going to have 5 P60's this april.

can i go ahead an register my children as British nationals.