Ben I appreciate your feedback and vetting of my info regrettable I read the FAQ of the Emergency group after I submitted so I should have included the items you suggested:

The tank is a Marineland 12 G salt tank kit, comes with a rectangular tank, generic full spectrum light, biowheel and charcoal filter pad. I have always frowned against kits as you usually end up replacing the provided supplies anyway. However this was a "special sale item" so I gave in. I replaced the T8 generic bulb with a Corallife 50/50 bulb.

I also added a Hydor Koralia Evolution 75 powerhead to increase circulation.

Salinitiy of the tank has been around 1.020 - 1.022
Nitrates have slowly risen the past week to approx 10 pmm.
Nitrite is 0 ppm
pH 7.8
NH - do not remember this off the top of my head may have to post later.

I noticed there was some tension between the clown and pseudo when we first introduced them into the tank. However, the damsel and clown usually hang out on one side of the tank in their hiding spots and swim with no nipping. The pseudo hangs out on the other side of the tank. During feeding I have not noticed any agressiveness toward each other. If they make it through the Ich then I will take you up on the suggestion and split them up into other tanks.

I have seen the compatibility charts regrettably after purchase, which is why I have kept a close eye out for aggresiveness. Is there a rule of thumb or guide for determining the bioload or is it a matter of the amount of filtration/live rock going on in the aquarium? Once again we bought this for our 4 y/o daughter so I did not want to turn this into a full fledged reef system with refugium/sump. So any ideas for preserving a small system for her would be great. Unfortunately for my daughter we are also using this as a learning experience before moving onto a full fledged large reef tank .