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The ranking reports are run on a weekly basis.  Your rankings will vary depending on how your native google search settings are configured.  Make sure that your google settings are set for national and not city specific and make sure you are not viewing personalized search reviews when you're logged into gmail.

OSE doesn't show all the links.  Just because its not listed doesn't mean its not relevant.  I have a couple of websites that have links from the BBB and those are not listed in the explorer.

I don't think that is abnormal.  I have not had any drops like that lately, but I know about a year and a half ago we would go from like 6 -> 25 and then the next week we would be at 2 and occupy that spot for 3-6 months.  I started noticing when we dropped it was an indication that we were going to jump up a couple spots in the next week or so.  Not sure how scientific that is or if there is any documentation to that, but it happened to us multiple times.

We use Istock - I believe you get what you pay for in the stock photography area.  There are some free stock photos, but you have to be careful with royalty free etc.

Unless I missed can you attach the real URL of your website or PM the URL.

Here are my comments...

1. Guest Blogging - Is he planning to write blogs for other websites or is he getting people to guest blog for his website?  I don't think its bad for him to guest blog for other websites as long as its not spamish material.  Guest blogging can be an SEO benefit, but more importantly I think it may drive wanted traffic if he is writing awesome material.

2. Press Release Marketing is a tad outdated and if I am not mistaken Google doesn't even look for press releases anymore. I don't think its a bad practice for realistic Press Release items such as new product lines, business mergers or something of that sort.

3)Blog Commenting will have little to no effect on his SERPS.  If he chooses to manually do blog comments that are informative and not anchor text driven then that will be fine.

I always believe that as an SEO consultant you should drive your meetings and the strategies. If a client has a different idea and doesn't budget it might be time to fire them

For the on page optimization tool it is one keyword per page.

I have been using the Fresh Web Mentions.  Not sure if that is all that accurate, but pretty much lets me know when new mentions have been indexed.

You are running a report on your domain not individual pages.  Your report will produce a report of errors on all pages, but the basis of the campaign is your domain.  If you want to run individual page report on how optimized each page is use the:

research tools -> On-Page Optimization tool

insert the directed keyword and the page you are trying to optimize.

What he is trying to say is the package doesnt offer anything of value.  I would say that 90% of what he is proposing is automated and spun content. I think you meed to realize how much time all of that would take if submitted manually.  I would run for the hills or hire a reputable consultant here for more money

There are multiple paid directories - as far as what is worth the price tag?  It really depends on what your competition is supporting in their link profile.  I personally don't engage in any paid directories, not because I feel like I'm going to get penalized, but I don't think any of the sites are worth a yearly amount.

1)Yahoo
2) Business Directory 
3) Best of the web
4) BBB

It really depends, if you respond with "Google geo-locates your business services" , he may reply and say "my competitors a,b,c,d are ranking for "city keyword, why can't you deliver that".  My only advice is to optimize his Google Places listing to get him ranking for those local keywords.  There really is not a way to optimize for 50 cities and 80 zipcode without having duplicate content.  Also it seems that your client has taken a strategy role, he hired you to for search engine optimization and you should be delivering the strategy to him.  You make be able to back your case by showing traffic measures.

If the content differs then you will be fine.  There are literally millions of sites using the same structure and template.  Just make sure all your content is original and it doesn't reflect similar content on both sites.

I always vary my anchor text (external or internal).   I would also caution using anchor text in abundance.  I would make it look natural by using (click here), the actual page name, variations of the keywords you are targeting.

In most cases you don't need a region based SEO company.  I have multiple foreign based websites we do SEO on and have great success.

Not going to lie - I actually find the older page more eye catching. Reasons being....

1. content is front and center

2. there is an actual form to fill out to the right (No Additional Clicks Needed)

3)testimonials should not be a primary piece of content.  I consider them supporting section of pages.  on the new design you are featuring the testimonials.

What I think is happening is people are visiting your website and not realizing there is content below the fold.  As soon as they see that - they are hitting back and going to a different website.  Just my thoughts...

Use the same link structure as your old site (-) the .html.  Then set up 301 redirects for each page in your .htaccess and you should carry over the majority of your link juice.

I would set up a splash page letting people know that the page is going to be redirected.  I believe if your receiving decent traffic to your site that the end user's experience is more important than the search engine value.  You could also set up a splash page that reads they will automatically be redirected within "set amount of seconds"

I don't upgrade any of my client's listings.  As long as your citations are consistent across the board that will benefit them enough.  The only reason to upgrade is if your business benefits specifically from one site like Kudzu or YP.  You are just paying for more exposure on that specific site you upgrade on.

I wouldn't have exact content.  If it is just one website use the same site structure but change the content.  You can vary your content and messaging, but portray the same theme.  Google doesn't like duplicate content anyway you look at it.  Just my opinion though.