According to the Street Magic errata:

<<p. 103 Step 2: Choose Form(s) The first line should read:
“The ally spirit may have one (and only one) of the following powers: Inhabitation (p. 100), Materialization (p. 289, SR4), or Possession (p. 101).�>>

I'm assuming that only Possession traditions can give an ally the Possession form power - which of course would be useful to have your ally able to possess any prepared vessel or target of opportunity.

My question is this though - What traditions are allowed to give their spirits the Inhabitation power?
I don't see any restrictions on traditions listed... So other than Insect traditions where it is specifically allowed, are other traditions allowed to give their ally spirit the ability to Inhabit? Instead of possessing a Homunculus vessel, how about a mage getting his new Ally to Inhabit it? Anything RAW prohibit this?

It seems to have both positives and negatives: Positives - Pop an Ally in a Plasteel Homunculus (that you paid the designer to look like the latest Anthroform butler model) and it gets Aura Masking for free and can go with you most places. Negatives - no hopping around from vessel to vessel flexibility.

I see also on (Street Magic p. 105 Enhancing an Ally) where it says that "A new Inhabitation Test is not required for inhabiting ally spirits, though the conjurer can provide a new vessel and have the spirit merge with it instead (leaving the old vessel a discarded husk)."

This, combined with the page of homunculi forms, seems to reinforce the fact that it is available to Player Characters - but STILL not sure if there is a limitation or if any tradition can make an Ally capable of Inhabiting.

Aside from the non-living vessels, now I get to thinking of finding some out-of-work pit fighter with wicked combat skills and 'ware and preparing him as a vessel, you know, by strapping him to a table with an IV for a few days....

Shadowland Personal Ad: "Looking for top-level muscle, extended job requiring days incommunicado.... see Mr. Mage for details."

Bugger the pit fighter. If you want to get a spirit to inhabit someone you want a vampire mage.

Then the spirit gets all the badass vampire powers, his own badassery, and most vampires can conjure spirits.. which is badass. You lose out on hacking because vampire boy probably doesn't have a datajack, but hey!

When I was looking this up, I also saw in the Street Magic errata:

<<p. 100 Flesh Form The second line should read:
“… and skills (both Active and Knowledge, with the exception of Conjuring skills) of the host, … �>>

So RAW is consistent that no Ally-type spirit can have any Conjuring skills. See, the problem is how do you keep a vampire mage still for days w/o him projecting, etc. It'd be easy to keep a muscle guy in a chemical coma or some such until the merge was complete.

Honestly though, I think I am leaning towards that Plasteel Homunculus more... You can give it skills at creation of the Ally anyway, so you don't really need the skills of some schmoe. If it's the plasteel statue, it doesn't ever need to breathe, sleep, excrete, etc. You could have it sit waiting underwater for a week or have it shipped in suborbital cargo... It's just a statue that appears non-magical (because Inhabitation gave it Aura Masking).

Now to save up enough Karma for the next few months to make the force high enough to be really worth it

The answer is yes. Possession mages can give their Ally Possession or Inhabitation (Choose One), and Materialisation mages can give their Ally Materialisation or Inhabitation (Choose One).

As you say, there are positives and negatives. Inhabitation enables you to potentially create very tough allies, but don't underestimate the tremendous flexibility of manifestation. And certainly you can find some Pit Fighter and stitch your spirit into him (Trolls are best), but just remember that anyone who sees you turning random people into your eternal slaves is going to be edgy about you. And if you fail to get a Flesh Form, the thing will be rather obvious as a spirit.