I havne't had a chance to try it yet, but I'm wondering if I could use the P5 clothroom to have a figure 'sink' into the mattress by clothifying the mattress. My first instinct is to do the simulation inverted so the mattress 'drapes' around the figure, then reinvert everything right side up. Anyone else have any ideas on this subject?

You'd likely need to constrain or choreograph every part of the mattress except the top.

.

And yet another Holy Grail is achieved with P5.....

If you have an object that can't be "clothified", there is a python script called eureka in freestuff that can achieve the same deformer effect.

Much easier to use a displacement map, IMO. P5 Firefly has excellent displacment built into the renderer. You'll need to get a "footprint" of the character from above-- if you save out a TIFF, you'll get an alpha channel of the character's outline. Blur this a bit in Photoshop, and use in the displacment channel of your bed texture. Another advantage is that you can paint wrinkles and folds in the bedclothers right into the map. Map can be animated by keyframing the displacement strength, or save out transformed mesh and use as a morph target.

Displacement is a excellent approach, also, at least for stills. It'd probably be more challenging to animate the mattress displacement if the character were moving around on the bed. I've created trails and footprints in snow, using the same overhead technique you describe.