OP, sounds like perfectly normal development to me.
our situation looks like this...
i'm german, dh is american. we moved to germany while pregnant with DD (3 1/2 now). until she was almost two i spoke only german, he spoke only english to her. she started speaking on the later side and then 80-90percent of her vocabulary was in german. this worried us, as dh is basically her only "english connection" here. so we decided to make english our "family language". we have friends whose children REFUSE to speak english because they know mama understands german. we absolutely didn't want that to happen. so we switched, which took me a couple weeks to get used to. DDs speech changed quickly. first to 50/50 and then it slowly progressed to her speaking more english and less german. this of course had my family a little concerned. but they all understand english very well, so it wasn't a huge issue and i reassured them that once she'd start german kindergarten, she'd catch up in no time.
she's been going to kindergarten for 3 1/2 months now and only for four hours a day. the teachers were immediately impressed with her bilingual abilities. they kept asking me "how did you do that?? she speaks it both so well!". of course she makes lots of mistakes in both languages still. more than her german only friends, but less than some other "foreigners" in her age group. she switches forth and back between german and english without problems. she'll talk to her teacher or friend in german, turn around to me and say a sentence in english and jump back to german for her friend. she also KNOWS that she speaks to languages. sometimes she knows a word only in german and she'll ask me "what's diesunddas in english, mama?". so cute! :)
and we really didn't make any kind of effort to "train" or "teach" her in any particular fashion. we just went with what felt right and seemed to make sense and so far, it's proven to work well.
now our younger daughter is 22months old and barely speaks at all. i'm starting to get a little worried about that. she has hearing issues which we'll need to further investigate. and i think it is more confusing for her now because at this point, my husband speaks very good german and he's on the phone talking to people in german all day long. we also live in a house with my grandparents and my brother, so she hears lots of german there and of course she hears me speak german more because when they're around i speak as much german as possible. and our oldest daughter has basically made german her "play language" ever since she started kindergarten. so when the two are playing together, as long as they are by themselves in their room, the older one will speak german to the younger one and then they come into the living room and include me in their play and everything switches to english. must be confusing for someone who's trying to decode and imitade... i can tell she understands everything perfectly though. in both languages. so that's good.
as for english in school.... i'm dreading the thought of it. i've researched my brain out trying to find a way to either get them into a bilingual school or one where they won't have to take english at all (we'd substitute at home) or one where at least they won't be given a hard time for being way ahead of everyone else. it's SO frustrating and i'm really worried about it.
my hopes are that somehow we'll strike gold for some crazy reason before they start fifth grade so that we can send them to this awesome montessori school in town. that's just about the only place here where i don't think their being bilingual will mostly be a disadvantage. :( gosh, i HATE the german school system so much. it seriously nearly killed me. especially in my passion for languages...