I did my application in April, and I also posted mine to the referees. I also included the postage and envelope for their return so they could just drop it in the postbox. I was also hoping it'd be fully online, as I believe the passport one is.
Regarding the proof of residence, I used every passport I have had since being here (two of them, as I had to renew at one point). I'm a USC with ILR (SET-M), so I went based off of those requirements. The person who assisted with my biometrics was a bit arrogant and acted like he knew all of the rules. He insisted that "passports aren't stamped" and that I needed proof of a five-year mortgage and council tax. I was really firm with him that I didn't need those bits, and he really tried to belittle me in front of the other people there. I told him to go ahead and look at my passport to see the stamps (he didn't), and so if you get someone who is as arrogant as him, just be really firm. He said to me, "At the end of the day it's your application!" Anyway...
Best of luck to you! You're almost done with the Home Office!