Myke,
You are doing fine. There is absolutely nothing wrong with cycling with fish, as long as you choose hardy fish and stick to the easy-does-it approach (small bio-load at first). There are some die-hard advocates of fishless cycling here, and there's nothing wrong with that, but the overwhelming majority of folks (including me) still choose to cycle with fish - the "all natural" way.
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Fishless cycling can be great when done properly by someone who knows what they're doing, but it isn't the end-all be-all that people want you to believe. It can cut a lot of time out if done properly, but it can also leave your tank in a mess if you don't. IMHO, if you have the patience for it, cycling with fish is a better idea anyway, especially if you aren't a very experienced aquarist.
My advice, for what it's worth:
You need to get a comprehensive water test kit. If you don't know what it is already, you need to determine your water's pH level. The "danger level" of ammonia is dependent on your water's pH. At a pH of 6.5 ammonia concentrations of up to 10.0 ppm are "safe" for all but the most sensitive fish (though I don't encourage you to let it get that high), but at a pH of 7.8 even 0.5 ppm can be deadly. So in general, the lower your pH is the less critical your ammonia situation can get in a short amount of time. If your pH is in the higher readings, you might want to consider a means of bringing it *gently* down into the more neutral or slightly acidic range until the cycle is completed (most cichlids need a higher pH, so it may need to go up again later, but first thing's first - cycle first and then worry about that afterward). I'd test for ammonia every day or two (doing partial water changes only if necessary) until you see the ammonia drop (and it drops fast). Once you have zero ammonia, test every three or four days for nitrite. You don't really care about the quantity of nitrite, because when cycling most tanks only take a day or two to "top out" a common nitrite test kit, and you don't actually know how much is in there anyway. During the cycle, you're really testing to see if the nitrite is still there, not so much to determine how much there is. It will almost always spike beyond the measurement capability of your test kit. If you feel your fish are uncomoftable or becoming unhealthy, do partial water changes, if you must, until you're happy. Just remember, the more water you change, the more nitrite you're removing, the more you're removing the substance that draws the bacteria you're waiting to establish. After nitrite levels drop to zero, re-test ammonia to confirm it's still zero. If both are zero, you're cycled!
Opinions vary on this, as you'll see, but here are mine:
When cycling, do no water changes unless your test kit indicates that ammonia is in the danger zone (the "danger zone" again, is dependant on your pH. If your water is pH 7.0, there is no need to do changes at 0.5 ppm ammonia). Look at it this way, the bacteria you're trying to establish consume the ammonia the fish generate; how could it possibly help encourage colonization if you're constantly removing what will attract the bacteria in the first place? This must be understood, but accepted with reason, of course, because you don't want to poison your fish, either.
Do not vacuum gravel until the cycle is complete; you only run the risk of disturbing the colonization sites of the bacteria you're trying to cultivate.
If you get algae or diatoms during the cycle, do not treat with any sort of chemical. You can scrub it off manually if it bothers you, but let it be until after the cycling is complete, and then deal with it (often once the cycle finishes it disappears anyway). When cycling, your tank is slowly finding it's equilibrium - we are only hindering that process when we keep adding chemicals to the tank. Until the cycle completes, unless absolutely necessary nothing should go into the tank but water (dechlorinated), a little aquarium salt (if you choose), a bacteria starter (if you choose), and fish food.
The thing you need most importantly when cycling: patience, patience, patience. B) This is going to take a while, but you're doing it right and you can rest easy knowing that when it's done, nature (not chemicals) will find exactly the right system equilibrium for the bio-load you have in there. Your tank *will* cycle, but in nature's time, not yours, or mine, or anyone elses. On average, tanks cycle naturally in 30 to 35 days or so, but mine took 51. Others have taken less. In my experience, you'll see the ammonia drop in one to two weeks, and then it will seem like you're waiting an eternity before the nitrite drops.
One more thing: I strongly recommend the beginner FAQ
here, if you haven't seen it already - and especially the portion on the nitrogen cycle,
here.
Hope that helps!
pendragon!