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The uk version of the site was first. It was beyond my control. I would obviously have set them up as completely separate subdomains. I'm just wondering if the key terms the UK site was ranking for if Google looks at that and only ranks one site associated with the root domain for a term like "iphone insurance". US Google still ranks the other site (UK version) for several terms.

We've had very good results by silo'ing our content.  We do use drop down menus.  We are ranking very high (top three) for some targeted key phrases that are over two categories deep.  I'm a big fan of the silo approach.

Here's another post that may be of help in moving a dev wordpress site to a live site. http://www.billerickson.net/how-to-move-your-wordpress-website/ Some services, like page.ly (which has a new discount for pro members now! http://www.seomoz.org/pro-perks)  make it real easy to do a dev site on their sub domain while your current site is still live, then switch it over after you finish everything in WP.

Thanks for the input. For the company I'm working for we're doing a new blog and I plan on linking back to certain pages of the main site that are relevant to the blogpost.

New backlinks can take up to two months to show in Open Site Explorer, because of the way the crawls are scheduled. Also, OSE only crawls the top 25% of the web, so if some of those links are on old forum threads in low-value sites, they may not show at all. Generally, they will show within two months.

Have you tried PRLeap, PRWeb, and Vocus? I've seen tons of articles get picked up by Google news and displayed at the top of the SERPS without too much work using PRWeb, and Vocus can help you find journalists responsible for syndicating content in all kinds of big name channels. You can also try googling creatively with industry-relevant keywords and advanced search operators to find sites that Google itself currently sees as authoritative, which are also publishing guest articles, then try submitting your articles to them. I would also consider becoming a syndicator of content yourself. Google has guidelines to follow to get yourself recognized as a source for Google news (you have to apply), and it may behoove you to set yourself up to syndicate other people's content (and your own). It would give you tons of control, the opportunity to crowd-source content on your own site, etc.