Chimbu, some very astute observations, as always
BUT I think you're wrong in one of the central and early assumptions in your chain of events: Asia, and particularly China, and to a lesser degree India, will not be dragged into a massive recession methinks.
Why? China is so incredibly cashed up (they are the main financier of the Bush administration's loose monetary policy, a delicate irony often overlooked) and is such a huge net buyer of commodities, that it is very resistant to economic downturn elsewhere in the world. Most of the growth in China is home made. There are hundreds of millions of peasants climbing the social ladder, a development akin to industrialisation in Europe a few hundred years ago. In my view pretty much nothing can stop them. Also, they're protected by a system that is not pure capitalism and as such can be more inventive and ruthless in times of crises.
Of course trade of China (and India for that matter) with the rest of the world will slow, but most of the growth in those countries as I said comes from within and ripples out (private and infrastructure construction is probably the biggest part). Economic growth comes in large parts from population growth and access to means of production, and this is in its purest form what is happening in India and China these days. (I'd even go so far to say that this won't stop even if the world's financial system grinds to a halt. China will simply decree a system of their own and continue. A little far fetched? Maybe. Possible? Absolutely. But I am digressing..
)
The US are going down fast, and deservedly so, and are taking the willing participants of their financial follies with them. Good! That bubble needed to burst much earlier. I won't look at my share portfolios for a few years and otherwise probably not be affected too much..
Aviation: As mining will continue to develop (maybe a bit slower), demand for aviation in those parts will not dry up. The training industry will continue to grow, demand from China, India, the Middle East and the rest of Asia will not slow too much (see above, growth there will continue). The Middle East is equally cashed up and rapidly growing with their oil money, so I don't expect that too slow either.
House prices in Australia? You're spot on, the situation is ridiculous and there's a bubble waiting to burst, and I've got a few bob stashed away for when it'll happen, I'll snatch up a nice little bargain then. Every folly needs at least two willing participants. In this case it's greedy bankers, estate agents and developers on the one side, and silly private individuals on the other hand who would rather ruin themselves than rent. They've got another thing coming!
Yes, eventually there will be a property crash in Australia, but it's not going to be as a direct result of this US-made crisis. (There'll be a change of government in the US soon, and things will calm down and right themselves, capitalism has a way of adjusting supply and demand automatically).
When it does crash Down Under, it'll crash big, because we're sitting on a house bubble worse than in the US (7.5 times annual earnings? Ridiculous and unsustainable!). But Aussie homes are not secured by the dodgy financial instruments that are falling apart in the US, and banks not majorly affected (we are at the end of the world, remember?
).
What results the crash here will have I can't even begin to speculate on. But it will hopefully end a situation where the government can keep land release for development way behind population growth (thus artificially increasing land prices), and maybe, just maybe, it will dispel the imported Anglo-Saxon myth that it's somehow uncool to rent..
In three words:
Keep flying guys 
Demand for pilots will continue to increase, especially because now even more budding pilots will shy away from forking out the cash to get their CPL's.