My short reply to "When I should apply" question - "Whenever you are ready". Which means when you are able to produce your best GMAT scores, when you think you have those essays bullet-proof, when you think you will be able to get better recos, when you think your ideas have crystallized..........
Standard reply - R1 > R2. This is simple. Think about when you start off your month. You potentially have a larger budget so might get swayed into buying something emotionally. Same thing happens in applications. The AdComm still has a few hundred seats to fill so they might say "You know this guy is good enough, I think applicants of this calibre deserve to get in". The same response a few months down the line might be "You know this guy is good. But heck I already have 10 guys with similar profiles - what does he have different ?" Get the point ?
Read this very well-articulated post:
http://daveformba.blogspot.com/2006/...-to-start.html
Arun