Maybe a dumb question, but how do I know for sure when the client is done downloading blocks and actually working on them?
Look at
http://blockexplorer.com/ That shows you that the current last block is 130207, at the time of this post.
Blockexplorer.com has lots of other cools stuff you can do like look at the block, the transactions inside a block, see how many bitcoins are available to an address, see what the next difficulty level is likely to be, and more.