Go and look on
http://www.iam.org for information. Also get in contact with your local group (if you decide to go ahead with the IAM course you'll have lots of contact with them) and ask them to clarify any questions you may have.
Skill for life program is £99 (£79 if you are under 25yo)
http://www.iam.org.uk/eshop/membershipshop/sfl.htm
I've been a member since I was 18. I'll try and answer your questions...hope I've remembered the details correctly...
1. There is a test. About 90mins long taking in all types of roads, manoeuvres and your driving needs to be of a very high standard to pass. The examiner will be a serving advanced police driver (i.e traffic dept.) or a retired Class 1 advanced police driver. My examiner was ex-police and owner of a local driving school. You will be asked to provide a running commentary (ala police) for about 15minutes.
2. Who will be teaching you...well not the IAM. You'll need to find a driving instructor who teaches advanced driving or take it upon yourself and go it alone. I was lucky in that my dad was in the traffic police and taught me to dry at an advanced standard from day one.
The IAM will provide you with an 'observer.' You go out with the observer and drive around as if you were on a lesson, the difference being that they are only there to observe...not teach. They provide critism and advice on what needs to be improved. The observers time is free which is fantastic, these volunteers do a great job! Once they are satisfied that you are at the required standard you go on a drive with the head observer who will then refer you to an examiner.
The IAM group will probably run a series of lectures each year for new associates (our local group certainly does). I never went to any but I believe they are very worth while.
3. You do all of the observe drives and your test in your own car. I had a K-reg Toyota Corolla 1.6 GLi at the time. My observer always commented on it being more comfortable that his other associates S-Type Jaguar, haha!
I save a little on insurance, maybe £60-100 depending on the car/quote. I'm 22, 1 years NCB, 5years driving, no accidents or points etc and I pay £860 for a Clio 182 Cup with very low voluntary excesses on Elephant. It's quite a lot but without the IAM it would be EVEN more. The IAM also has it's own insurance scheme for members only called IAM Surety. I haven't phoned them as I don't think they could do much for me given my age and low NCB.
The biggest benefit is the skill increase. Your car control will improve as will your observation and planning. The standard DSA test we all go through doesn't really cover rural road driving at all...I found with the IAM I spent a lot of time driving on B-roads and back roads. These are after all the most dangerous (at least up here). Once you learn to read the road (limit points, understanding road markings and signage better) you can make much safer, smoother and even brisker progress. You don't have to drive by the letter every second of every day but at least you have the ability to 'turn it on.'
