Sorry about the near-deafening silence, here, but I haven't had much to say. I know I should probably be finishing off some of the posts I'd previously promised; there's still another re-design of a planar creature type that I wanted to do, and I believe I still had something to write about the subhexcrawl. However, those (and others on my to-do list) are pretty involved, so I've been procrastinating.
Instead, I thought I'd point everyone to this recent post on Stuart's blog about using monsters as PCs. It's pretty similar to the way I've thought about handling monster PCs (assume they are high level but 0 xp and make players earn the difference before advancing.) But there's a couple differences in the way I'd handle it. First, I wouldn't allow monsters of 9 HD or more, since that is the "end game level" for other characters and should be something the players work for.
Second, I don't use B/X, so the part about stars for special abilities doesn't apply; instead, monsters that cast spells or use spell-like powers are treated as magic-users instead of fighters. Since I use the all-d6s hit dice method, it's easy to look up the monster's hit dice on the magic-user HD progression and translate that into a level; in keeping with the previous point, I probably wouldn't allow magic-using monsters with more than 7 HD (10th level necromancer equivalent.)
Dragons and some other monsters can use the dragon progression, starting with the smallest version with full HD but only 1 hp per die. There's two possible ways to handle dragon level progression. The easy way is to use the above method directly, with the dragon increasing in size but not age when reaching the next level. The other is to divide hit points by 4 to get a level equivalent and allow advancement when that much lower target level is reached, adding 1d6 hit points every other level until the maximum hp for a small dragon of the given type is reached, then proceeding as normal. Either way, you should probably use the M-U charts for dragons, too.