One more relevant note, the UKBA uses language which is not immediately clear - 'settle' seems to mean 'indefinite leave to remain' and reading semantically I think this page about citizenship includes a line about this (though it would be useful if they used any of the same terms they use elsewhere on the website):
[if you are applying for citizenship based on your marriage to British citizen,] You must be free from immigration time restrictions on the day you make your application.
http://www.ukba.homeoffice.gov.uk/briti ... ofcitizen/
I think this means I must have been granted ILR, which I think is equivalent to 'permission to settle', which based on this link
http://www.ukba.homeoffice.gov.uk/visas ... ettlement/
requires biometrics, and which based on this link
http://www.ukba.homeoffice.gov.uk/visas ... tiontypes/
I would do using form SET(M) as an already-in-the-UK spouse or SET (O) as a Tier1/Tier2 5-year resident. The two forms have the same fee but SET (M) can be done via local authority Settlement Checking service which sounds like the way to go in my book. At a quick glance this option does not seem to be available for SET (O).
http://www.ukba.homeoffice.gov.uk/visas ... ormset(m)/
http://www.ukba.homeoffice.gov.uk/visas ... ormset(o)/
However, even with Settlement Checking, the best the UKBA promises to do with postal applications is decide 90% of them in 6 months. Since I only have 4 months until my Tier 2 expires, I may need to spend the extra money for a premium in person appointment. I'll call my local authority settlement checking service tomorrow to see if they have further advice.
I may have answered my own questions here, but if anyone knowledgable could confirm, that would of course be hugely helpful and appreciated - not just by me but by future readers of the post; I hope I have saved someone some time with this!