Since I started this thread, the same questions keep coming up. I'm happy to answer, but I'm not the authority. The Bundesamt für Migration (BFM) is the Swiss department that handles your applications. They have a very informative web site (in English too!) at: http://www.bfm.admin.ch/bfm/en/home/...uergerung.html
The magic phrase is "Erleichterte Einbügerung" (faciliated naturalisation).
Read carefully - it's all there!
RS