Re: How ready should you be for a test?
Most of my previous sensei have said that you should be able to do all of the material of the next level up from what you're testing to a pretty good performance level, and the test you're going for should be quite easy.
Another thing most of them have said is that while the test is important to the person doing the test, it's also an examination of the sensei - what kind of student is this person turning out...
My senseis haven't put me forward for testing until they thought I was more than ready. My shodan test - the shihan signed the form, gave it to my dojo sensei, and told him to test me later in the week.
Gotta go watch a river go past..