Russell,
You seem to have asked a lot of questions in that post. I think most of the answers you are looking for have been covered in various other threads in the recent past. Try performing a search for relavent information.
The old debate to degree or not to degree is still raging. There are many opinions out there on this one. You are right though it would be great to have to fall back on if you ever need it. You should really spend some time studying the current state of the industry to try and help make your decision. From what I can gather the industry is in such a state of limbo at the moment (with possible impending war) that there has never been a better time to go and get a degree whilst you see how everything pans out.
You mention that you might get a sponsorship with BA. You seem to say this as if it were an option for you to choose. Even if BA were running a sponsorship at the moment (which I don't believe they ever will again) it would be absolutely swamped with applications. You would do well to stand out with no flying experience (proof of interest or dedication) and no degree. If you research you will see that sponsorship opportunities are currently very thin on the ground. The most recent ones being CTC McAlpine and Britannia. In my opinion I can't recommend strongly enough to go to Uni. If I were to type out all the benefits I would be here all night. A degree in a good subject from a reputable establishment will make you stand out it applications. Things are soooo competitive out there that you really need to try and get ahead of the game in any way that you can. Don't forget that Uni is bloody good fun. You will have the most amazing time.
If you are keen to get on with job searching and get flying then it might be an idea to skip the 5 year degree course and just do a batchelors. I never went for the masters as I was keen to finish my degree and launch myself into the recruitment boom (well there was a boom before 9/11 happened). I don't regret doing a short course and now I have letters after my name and a bloody good qualification for applications and if I ever need to fall back on something. I could really type all night on this trying to compile a structured argument for a degree, but just try and do some searching among these threads for the answers.
Hope this helps
PT