Void & Sky Dog... I already addressed all of your questions throughout the thread, but let me attempt to recap.
I was <500 ft and coming in a little fast. That he was talking me through "best practices" was obviously the wrong way of stating the situation.
In order to reduce speed, I reached to make an adjustment on the throttle and he advised using flaps before power. That was pretty much it. Shortly thereafter, his demeanor changed. I assumed it was because of what I was doing, but then I saw the jet taxing out. My CFI heard the call before the jet started moving. The jet started moving immediately when the call was made and radioed back his clearance as he taxied out.
So, basically, I reacted to seeing the jet moving and he reacted to hearing the clearance call. He then talked me through a go-around. We were well into the go-around before I saw the jet even start moving down the runway, so, yeah... trust me, there would have absolutely been a conflict had I continued on my path.
Again, it wasn't the first ATC issue that day, just the last and largest in the line. The only thing I fault the jet for is not looking for incoming traffic before moving out. I don't fault my CFI for anything, as he advised me to go-around, talked me safely through the procedure and made the event a helpful learning experience.
Not really much else to clarify on this. Thank you for your input.
Captain - heh. Let's hope it's the smile & groan!