'India-Mike,
I'm currently finishing my ATPL theory. In Jan. '07 I have a financially-driven choice - pay for an instructor rating; or pay for a CPL.
In order to instruct, you need to have passed the CPL written exams, therefore you may as well do the whole thing. Also:
If I go the former route, two local clubs get the benefit of an instructor next year that they wouldn't have. If I go the latter route I'll have a completely useless piece of paper for a year before I can afford the instructor rating.
Oh, and I won't be instructing for free. The clubs can charge a dual rate as usual - I simply won't be receiving any valuable consideration until CPL in '08.
You may not be receiving any valuable consideration but the club will be, unless it's none profit making (pretty unlikely). Therefore you need a CPL. If there is any money changing hands, you need a commercial licence.