Rob,
Sorry to be coming into this thread late, it's been pretty hectic for me the last week or so.

I would like to add one piece of advice here. As an instructor you need to be able to say "no" to you student. What I mean here is that you need tell the student what needs to be done, and not having the student telling you. I've had several "students" over the years that have a know it all attitude, and they don't like to be told what to do. My only advice to you in situations like that is to explain from the start of instructions that you are the instructor. If they don't listen to that advice remember that you have the training switch in your hand and can take control of the plane. I had one student that every time I would tell him something he would say "I know", "ok, next time", "I've got it under control", "don't worry, I know what I'm doing", and so forth. All the while he was totally ignoring what I was telling him what to do. After a few minutes of this I simply took control of the plane, did a quick landing, killed the engine, handed the radio to the student, told him he was on his own from now on, and walked away. He begged and pleaded with me the rest of the day to take him back, but I told him no because I didn't feel like he was going to change. The other instructors at the field witnessed this happened (we usually compare notes on students anyway) and would not take him up. The following morning he arrived at the field with a written apology and a dozen donuts as a "peace offering", so I gave him another chance. Turned out to be a fantastic student once he started to listen to me.

Just remember out there that you are the instructor and they are the student. They won't learn if they won't listen to you.

Hope this helps

Ken