The idea of the original post above was that of general information rather than legal interpretation.
Anyhow, the following is an illustration from the Tier 1 application form (section 3) to support my understanding that Tier 1 applications with an HSMP approval in hand are considered a "switch". Please follow text in
blue
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a) Is the applicant making an application for:
Initial entry (switching) into Tier 1 (General) - go to next question
Extension within Tier 1 (General) - go to question c
b) Does the applicant currently hold an unexpired approval letter under the Highly Skilled Migrant Programme?
Yes - go to section Z
No - go to section 3a
c) Is the applicant currently in the UK under:
Tier 1 (General) - go to section 3b
The Highly Skilled Migrants Programme - go to section 3c
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Now if you don't check "initial entry (switching), you never get to select that you hold an unexpired HSMP approval letter.
The bottom-line, as I understand it, is initial entry to Tier 1. The form itself is titled "Applications for intial entry (switching) or extension of stay within Tier 1 (General)". If Tier 1 applications with HSMP approvals are considered as initial entry but not switching, then strictly speaking, it should have been "initial entry / switching" and not "initial entry (switching)" in the guidelines and in the form.

. Moreover,
any applicant applying from within UK with a HSMP approval in hand will have some sort of leave to remain in UK that allows him to switch at the time of application. If that is not so, one is not allowed to apply. 
.
That leaves us with one category of applicants - people applying from India (currently, or anywhere outside UK as and when Tier 1 starts getting rolled out) with HSMP approval in hand - where it seems to make sense that since they do not have existing leave to remain in UK (and hence do not fill this form but a different one), they cannot be considered as "switching" to Tier 1. But for me, in the English language I learnt, "initial entry (switching)" in other words means "initial entry = switching". Or maybe it is time for a lengthy refresher course (ESOL) for me

.
Phew !! All I wanted to do was explain to people PMing me that Tier 1 application with HSMP approval in hand was not an "extension application". The form and policy guidance present two broad categories - switching and extension - and I tried to provide an explanation in that context.
Nevertheless, I hope it is now clear(er) as to which category each UK applicant belongs to - switching or extension. As for people from outside UK making a Tier 1 application (new or with HSMP approval in hand), they should rather consider themselves as applying for initial entry to Tier 1, based on strict legal jargon.
regards
If you consider yourself highly skilled, think like one.
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