Hi Dadzin,
Welcome to the POS forum.. Wow! February.. and I was getting impatient at 5 months.. you've definitely waited longer than us. Since you are having to sponsor your children, I assume you are not a Canadian citizen? Are you a PR?
So your App was filed Feb 22 2012
Sponsor approval/transfer to POS Ma 23 2012
Did you get an AOR (Acknowledgement of Receipt) of the date your file actually GOT to POS (not the date it was sent)?
Congrats on your growing family! Adding a dependent in the middle of the process may delay your application a bit. Not because it's frowned upon or anything, but if you think about it, you would need to wait for the paperwork for the child, it's transfer, your application would have to be pulled and update with the new information, etc. If there is a delay, it would likely be due to waiting for the paperwork and having to update your file.
Being in Canada does not cause a delay. People who apply inland (application stays in Canada, never goes foreign to POS or anywhere) have longer processing because they are not priority but outland applications would not be delayed because you are in Canada. In fact, as a sponsor, it is better for you to be in Canada. When you say you "sent them back" you mean your wife and child, correct? That's hard.. especially with her being pregnant, but health care without insurance is a big issue so I see why you would decide that.
You CAIPS notes should be sent to you 30 days after you applied for them. They should give you helpful information on how your file is progressing so far.
I hope I have answered all of your questions. Please confirm the date POS received your file (if you got an AOR) and we will add you to the spreadsheet (you can click the link under my profile in the bottom that says "POS spreadsheet"and it will give you information about everyone's timelines on this site).
If you have any questions - I'd love to help and if I don't know the answer, someone will.
Welcome and congrats again!