OK, this might be an incredibly dumb question, but as a new (as in only really watched properly since CE) viewer I am not really "up" on all the back story about timelords.

Are all Gallifreyans timelords, or are they a seperate "order" on the planet?

so you are born on Gallifrey and then get chosen to be "trained" as a timelord and go off to timelord school and once you have learnt all you need to know ans passed all your exams you are then given timelord status with all the regenerations and shizzle?

I always thought that everyone from Gallifray was a timelord. But then we have animals ect here. So everyone from Earth isn't human

The Tom Baker story "The Invasion of Time" depicted a group of Galifreyans who had broken away from Time Lord society and lived outside the citadel. It was never stateed I think whether they also ahd the ability regenerate

Well, I was just meaning "the people of gallifrey" so not animals, etc.

I was wondering if it was similar to the Jedi (sorry!!!!!!) where some people are born with the potential and get trained up, etc. and other people aren't

It's debatable. There were several stories set on Gallifrey in the classic series which featured characters who implicitly were not Time Lords and who deferred to the Time Lords as their superiors (the Chancellery Guard seemingly were not Time Lords, though they were clearly Gallifreyans). The implication, though never clarified, was that they were the elite, the rulers of Gallifrey. But the new series appears to use the name 'Time Lord' to mean anyone from Gallifrey. The simple answer is: we don't really know.

Just had a trawl through wiki and it seems to back up the "we don't know" angle as well

I'd back the "we don't know" argument.

Been reading the Doctor who the legend continues book and on page 222 it says the doctor is a Prydonian and was a student of Borusa at Prydon Academy.
Unsure if this is a species or a term given to people from an institution.

The fact that there's a Time Lord Academy would mean that Galifreyans (sp?!) are not bred as Time Lords, but are educated as Time Lords. If one of those 8 year olds ran away before looking into the schism it's doubtful that they could be called a "Time Lord".

It's a chapter...I suppose kind of like belong to a certain College at Cambridge or a certain house if you go to a posh school

If there are Lords, I'd say there must be commoners. I doubt if all those technicians and TV announcers and whatever in the original series were Time Lords; they'd find such tasks beneath them. The Lords must have someone to to lord it over.