Residence Permit - UK (London)

Hello All,

I am in the UK on an EEA family permit. I intend to apply for Residence permit which I reckon is issued for 5 months. However, I am concerned about the time it takes to receive that. I am married to a German citizen and he has a new work contract in London.
I heard we have to submit our passport to the Home office for about 2 to 3 months. Is that true??
And also, how about job search? Any one has experience of applying for jobs while your work permit is still in process.

Your help will be appreciated.
Nidzi