Do you mean that nitrites are 10, and nitrates are 0.25?
If so then those test results sound about right.
Soon your ammonia should be zero, your nitrites should begin to fall, and your nitrates should start increasing .
Follow
this link and scroll down a little ways to the image of an aquarium and press the play button for an animation of the cycle process.
Is this the critter you saw? (Photo from melevsreef)
If so then it is an amphipod and is very desirable. They will mostly appear at night. I find myself sometimes spending more time watching the pods than the other stuff in the tank. They are pretty cool little critters. It is entertaining to watch them fight over food too.
