Client is British citizen. Lived in N Cyprus for 3 years. Returned to UK in Nov 07 to care for her father. She was not working in Cyprus. Does residence in N Cyprus count for CA purposes. Does it matter if she did not work?

AFAIK, N Cyprus is not recognised by the UK government.

Hasn't Cyprus become reunited as a prerequisite of joining the EU? I've certainly come across Turkish Cypriots exercising freedom of movement...

No ....although tensions have eased over the past couple of years. some time ago they held a referendum in which the greek cypriot population voted overwhelmingly against reunification on the terms being put forward....there are serious problems over compensation for confiscated property, a lot of bad feeling and personal vendettas and a small matter of the continuing presence of a large military presence in the North. The only State that recognises the regime is Turkey.
Any Turkish Cypriots that you may come across can only have either a Republic of of Cyprus passport, or a Turkish passport. Passports issued by the northern regime are not issued by a legitamate Government and would not therefore be acceptable.