Thanks, do you know if there's an expiration on the settlement visa? If I file now, or soon and continue to live in the US for another year is that ok?
The visa is valid for 27 months, and if you were not able to apply for ILR right away (i.e. if you had not been married for 4 years or more), then you would need to enter the UK within 3 months of the start date in order to meet the 2-year residency requirement for the ILR visa. However, because you can apply for ILR as soon as you have taken the KOL, it won't matter if you wait a while after receiving the visa.
However, having said that, in order to be granted the visa, you need to show proof of your accommodation in the UK (tenancy agreement/mortgage statements/letters from landlords/owners stating you have permission to live there), estimated living expenses in the UK once you have arrived, proof of ability to support yourselves while in the UK, job prospects/job offers in the UK etc. - and trying to provide all of this info before you have started planning the move and organising the details is likely to be difficult, because you may not have this information/evidence yet.
When filing your settlement visa application, if you hire a visa expediter to hand-deliver the application to the consulate, your visa can be approved in as little as 24-48 hours, so it shouldn't be too much of a hassle to apply closer to the date you wish to move. The visa can be postdated by up to 3 months, so you can apply for it 3 months before you want it to start (i.e. state on your application what date you want it to start on).
If the settlement visa is approved and we have moved by May of 2011 will that be enough time to take the KOL and apply for ILR before July?
You can currently apply for ILR either by post (currently £820) or in person (currently £1020). By post, it can take several weeks/months to be approved, but I would imagine that as long as you have sent your application before the rules change, you would be okay. An in-person application would give a same-day decision, but it costs £200 more to go in person and there can be waits of up to a few weeks for an available appointment.
Alternatively, if you can make it over to the UK for a visit in the next few months and take the KOL while you're there, you could apply for ILE directly from the US (without having to apply for the spousal visa with KOL Req'd visa first and then applying for ILR in the UK) and then you wouldn't be tied to the deadline of moving before the rules change in July 2011.