Welcome, daveyboy1978!
Take a look at http://www.health.gov.bc.ca/msp/infoben/pdf/covering-a-spouse-or-child-who-is-an-applicant-for-permanent-resident-status-in-canada.pdf. Note that there are special rules for spouses: keep reading past the 'visitors aren't eligible portion until you get to "In addition, certain non-permanent residents may be deemed residents and thus be considered eligible (e.g., many holders of study and work permits valid for six or more months and many applicants for permanent resident status who are the spouse or child of an eligible B.C. resident)." There's also a section on what documents to include with the application for spouses.
Regarding your prior question about working, you don't mention your fiancee's profession, so http://www.cic.gc.ca/english/work/apply-who-nopermit.asp may help if you're very lucky. Also, http://www.cic.gc.ca/english/study/institutions/work-volunteer.asp, while written for students, gives insight into how CIC thinks through volunteering (vs. "work, remunerated or not", "which competes with the Canadian labour market").
Applying 'outland' means she would apply requesting the London visa office for Phase 2 (you would still send the application first to CPC-M). She can do this whether she is physically in the UK or in Canada. The application forms are available at http://www.cic.gc.ca/english/information/applications/fc.asp. The alternative would be to apply once she is in Canada ('inland'), in which case she would need to stay in Canada throughout the application process (if she leaves and is denied reentry, her inland application would be deemed abandoned since she wouldn't be able to land in Canada, and thus she'd need to start over applying 'outland'). As a British citizen, the complete 'outland' is generally faster than Phase 1 alone for 'inland' applicants. You can do the whole process via mail (once approved, the London visa office) will mail her the CoPR (Confirmation of Permanent Residency) that she would use to land (either at a border if you drive down to the US and visit the US or 'flagpole' and turn right around or at an inland office). The risk of applying outland is that if an interview were necessary, it would be in London. Interviews are rare and typically requested if there are questions on genuineness of the relationship.
Where you get married doesn't matter for CIC purposes. As long as it is legally valid civil marriage, and the marriage is valid both under the laws of the jurisdiction where it took place and under Canadian law you will be fine. So, get married wherever YOU two prefer to do so.
