teacup, you're in almost the same situation as we were last year. (O was 2.5 in September of '06)
I am going to respond to your question this way--you're not "supposed" to be applying now, in the sense that it's your call when (and if, but I'm assuming that you're interested) she goes to preschool. It would be totally fine and normal to wait until she's 3.5 to get her into a program.
If you are definitely interested in the '07/'08 school year for her, then I don't think you're too late. (Maybe the preschool situation in Indy is more high-stress and waiting list oriented; I don't know when those things start up. At worst, maybe by applying now, you'd get on a list for the next year, when she's 3.5???)
We mostly were interested in touring the Early Childhood Center we're using in order to get a sense of the place (we weren't planning on enrolling our girl in anything for sure, and I was on the fence about whether 2.5 or 3.5 would be more desirable....at the time we toured, she was a newly-minted 2.) I knew about at least one more preschool in town that was cheaper and also came highly recommended, so that was on my list to check out, as well. But still, we were mostly touring the ECC (it's at my husband's workplace, part of the college campus) to get a sense of what and how.
We fell pretty hard for the program, for its values and structures, and we started thinking in terms of our daughter being there. I always thought it was significant, not to mention mind-blowing, that my husband didn't even consider comparing the other (less-expensive) preschool! (I wanted to tour it, just to know what it was like, know all our options, etc. And if I'd had any reservations about the ECC, I would have insisted. I still think it's kind of remarkable that we didn't....)
So, we ended up applying after our tour. Let's see....The timeline: My husband told the director we had a toddler and expressed an interest in touring the facility at the fall '05 orientation for new college students (he was working the orientation tent and so was the ECC director. She told him she'd send him some info and we could consider scheduling a tour in the spring. So in our case, it seems that it was cool for inquiry to start the spring before the new school year.) So...We toured in early spring (March?) and submitted an application within a couple of weeks. They had explained their policy was to give priority to families who had had a child enrolled previously (or currently had an older sibling in the center), next priority to children of faculty and staff at the college (that was us), and then the community at large. I think they said they would mail out acceptance letters in late May, and would do class/teacher assignments later in the summer. So we got our letter of acceptance at the end of May.
I didn't ask any questions such as Do you usually have a waiting list? Do you usually have to turn people away? Are your classes usually full?
They do keep the classes relatively small, as they maintain an excellent teacher to student ratio. But in addition to that, the class size fluctuates day-to-day because you register your child for from 3 to 5 days a week, so there's a different mix of kids on any given day.
I'm suggesting that this kind of policy could influence how many kids are admitted into a program (even if they limit class size to 8 kids on any given day, if the preschool you're interested in has a similar setup with being open 5 days a week and having a requirement of enrolling for 3 days, you definitely can end up with more than 8 kids enrolled in the class, just not all there on the same days. So there might be more flexibility with accepting a slightly larger number, than with a preschool that fills each class and has school only on Tuesdays and Thursdays. If that makes sense.)
As far as the co-op, I've never researched the option (just heard about it in the forums here) but my response would be similar to yours: interested, but curious and concerned. Perhaps some answers could come just from knowing how they work. Is there one teacher who is hired, and then the parents provide the "additional" staffing? Or do parents do all the teaching? Are there always three parents on the schedule, or is it more likely just two at a time? There's probably a checks and balances system in place in which an adult is never alone with the children, but you'd have to find out. Like any organization, you'd want to know the policies and personnel surrounding the care of your child.