If I use the Military credits to do the exams (ATPL credit) then do a SEP Skills test and IR thus gaining a SEP CPL IR does this "Lock In" my ATPL theory credit? Could I then do a MEP conversion, Skills Test and IR say 5 years later without doing the exams again?
Yes. After issue of ATPL exams certificate you have three years to do CPL, and seven years to do your IR.
I guess I could let he CPL lapse and just do another Skills test again a few years down the line before doing the 6-12hrs MEP bits.
CPL does not "lapse". It is a licence so is valid for life (as long as you maintain current on some sort of aircraft class - the cheapest option being SEP).
You could just do CPL on SEP and then leave the MEP and IR/ME until you really need a job. But probably wise (given the way they move the goalposts) to get CPL and IR/SE and keep them current every year until you are ready to do the MEP, IR/ME/SP and MCC.
To keep your SEP and IR/SE current you would just have to do an annual IR/SE checkride which is not too onerous
Yes, I don't see the fascination with DA42. I've known mates complete CPLs in King Air and Cessna Dutchess to name a couple.
I've never heard of a JAR FTO offering CPL on a King Air - they'd need a lot of wealthy clients to survive! I don't know of an FTO even using Dutchess for CPL training (though plenty use them for IR/ME). For CPL, the course offered by an FTO has to be approved by the authority on a specific aircraft so FTOs will only go to the bother of getting a course authorised on an economically viable type. As far as I know the only MEP that has proven to be viable for a combined MEP/CPL course is DA42.