Okay, here goes my attempt to answers everyone's questions without adding any additional confusion.
1. None of the Changes will occur in the Age of Wyrms, which is the Age you are currently in, beyond role-playing events - going to the appropriate locale, performing the appropriate rituals, etc. Thus anyone who chooses "de-dragonification" or "dragonification" will remain a half-dragon as long as they are in the
Age of Wyrms. Once y'all enter your original Age, known as the Age of the Forge, you will lose your half-dragon template, unless you have chosen to stay a half-dragon. Those who have chosen "de-dragonification" will be given some options to retain
play-balance between characters depending on your original heritage (e.g. warforged, shifter, etc.), one of which will be the template "Legend Re-born". Those who choose to keep their half-dragon template will also be given some options to retain
play-balance between characters. Those who have chosen "dragonification" will lose their half-dragon template and be given a new template - "Dragon Re-born".
2. The Pros and Cons of "dragonification" depend a lot on what you are now. I'll pick on Kylar since he is leaving it up to fate to decide. If he went through the "dragonification" change, he would slowly stop being a longstrider shifter, with all of the benefits that it entailed, as he became a green dragon, with all of the benefits that comes with being a such a dragon. Since a lot of his shifter traits and features aren't part of the standard draconic package, so to speak, he would be getting a swap out of sorts. Lod, being an arcane caster and dragon prophet, would see nothing but upgrades. There is really no downside, beyond losing the extra feat and skill points that come with being a human. [Yew would be a special case, entirely.] You would keep all of your class related features, benefits, skills, and what not, regardless. Any feats that would become illegal, such as racial specific feats, would get 'transformed' in the process as you progressed up the "Dragon Re-born" template.
3. The "Dragon Re-born" template is somewhat of a misnomer, because it also acts like a PrC. I'll have more on the details later. The end result is that after 12 "levels" your character is a true dragon, not some partial dragon (greater than half). Roughly speaking, should we get to Epic Level, which is my goal, anyone who chose "dragonification" will be a dragon with some PC levels. Those that did not chose "dragonification" will Legends of a different stripe. :D
4. Regardless of what you chose to do there will be some pros and cons, but I will make sure that everyone's ECL, if you will, is the same.
I hope that answers your questions. If not, ask more. :)
-Ken