I am solo playing a Napoleonic game in order to get to understand the rules better before playing "for real" at my local wargames club in a couple of weeks time.
A situation arose out of a Cavalry Charge which I am not sure whether I handled correctly in a couple of aspects
A French Cavalry unit charged a British Unit (in line). The French needed two moves to reach the British, but only got one move on the Orders test, so stopped about 12 inches short of making contact. I assumed that the British would not be able to use the "Form Square" special rule since the cavalry did not actually make contact (in reality, Cavalry charges started at the walk, increased to trot then finally to a gallop, so I assume this one stopped at a trot and it would just be as though the cavalry advanced and halted, or possibly started late and were still trotting at the end of the move). On reflection I am not sure whether this is correct, and perhaps the British should have used the "Form Square" special rule, as the charge had started, even if it did not make contact. I presume that if the French Order had failed, even although the intention to charge was declared, that the "Form Square" rule would definitely not apply, since there would actually be no sign of the French attempting to charge.
During the following British Turn, the British battalion attempted to form square, but the Brigade Commander failed his orders test, so they remained in line. A British Cavalry Regiment was some way behind the British Infantry line but was given the order to charge the French Cavalry, passed its orders test and got 3 moves to do so (enough to reach the French Cavalry). Normally it could pass through the British infantry line (interpenetrate) with no problem, however the French response was to declare a countercharge. The half way point ended up behind the British Infantry line, so actually the French Cavalry would contact the British Infantry before the two cavalry units reached each other. I presume in this case the British infantry definitely can use the "Form Square" rule, and if the square is disordered the French Cavalry can charge, but in that case what happens to the British Cavalry, who have commenced their charge?
If the square is not disordered I presume that the French cavalry will flow around it and continue on to meet the British Cavalry at the half way point. All my logic says that this sweeping around a formed square would disorder the French Cavalry, but I can see nothing in the rules to make this happen.
You played it right. The infantry didn't have to form square. The final move is where the charge happens so the unit would only react then. The cavalry stopped well short of the actual charge move.
On your second scenario, I would have had the two units of cavalry form up in front of the infantry. Had I been the British commander, I would have included in the wording of the order that the cavalry would move to just in front of the infantry and then charge the enemy. This would make sure that the cavalry had cleared the infantry battalion before charging the French. Also, as the target of the French cavalry was the British Cavalry unit, the infantry would have ignored them as the French would have the infantry. They were reacting to the British cavalry and not the infantry, so couldn't charge the infantry. Really, it is all down to how you word the order. Also remember that the British Cavalry must have line of Sight to the French before they can charge, so they may well have needed to be in front of the infantry before they could charge.
As you have assumed the cavalry would flow around the square. That is true if the cavalry was charging the infantry, but they aren't. Their charge is a reaction to being charged themselves by the British Cavalry, so the infantry wouldn't be in square and the French cavalry is not allowed to charge them because it isn't their turn.
OK, I have just realised that I did not read page 56 well enough, which clearly explains that only the final move into contact is the charge itself. So, as you say, I should have ordered the British Cavalry to move to in front of the infantry, then charge. It is much more realistic to allow that (and in a different scenario would allow two squadrons of cavalry to move to within charge move of two different flanks of a square before charging (as recommended by General de Brack in "Light Cavalry Outposts" - therefore very realistic - assuming the army organisation allows separate squadrons, more about which later). Also the orders for the French Cavalry ought to have been to advance one move then charge, and as they only got one move the issue of the Infantry forming square would not have arisen.
As regards being able to see the enemy, does not the section at the top of Page 26 mean that it is possible to charge an enemy previously concealed by other units (and of course in real life cavalry would be able to see over infantry)?
No. What that means is that the target unit does not have to be in line of sight of the charging unit when the order is given to the charging unit. So, if the chargers were behind a hill for two moves it wouldn't matter because your order would be "Advance over the hill and charge the enemy on the other side" or something like that. However, if the charging unit is still on the opposite side of the hill when the third move starts, then it has no LOS to the enemy unit and can't charge. However the order was given three moves earlier. This is important because a unit cannot charge an enemy if it hasn't been given an order to do so. That's why it says what it does at the top of page 26.
Look at page 57. The first sentence under the heading "Measuring the Charge". That should clear everything up for you.