Re: How to deal with my sempai?
I've had a similar experience with somebody in my dojo. I started training before he did, but he got to shodan before me. Then he took several years off and I kept going. He came back to training when my wife and I opened our dojo - we're both sandan and he's still shodan. Like Anonymous's sempai, the person in my dojo came in with a great attitude - he just wanted to train. While I have 'passed' him, it hasn't mattered at all. I teach him more than he teaches me these days, but the important thing is that are all still training. I have great respect for his aikido and when we work together it is much more as collaborators than as student/teacher. He teaches classes from time to time and is a big asset in the dojo.
So I will echo what others have said - relax and enjoy having such a skilled person show up for your class each week. Train with him, learn from him (as we should all learn from our students) and don't worry about it. Also, if your sensei has assigned you that class, you shouldn't hand it over without asking.