Hooray! I'm wrong! See update at the bottom of the post.
Theming forms in Drupal is a challenge. Getting checkboxes and radios buttons into a table with other data can whip a small band of squirrels into a bird feeder frenzy. Add AHAH into the mix, and well, you've got grounds for a stiff drink and a nap. While I'm not sure I have done it "right" I'm posting some of my code here to give other people some grounds to fall into different pitfalls rather than mine.