If you can get some black water extract (and I swear by it!) for his fins, I think they should grow out nicely. To me he looks quite healthy, and the stuff on the bottom honestly looks like crap from the water and not much to worry about. I would focus on keeping him from getting any fin rot, and if you can feed him a high protein, mostly frozen diet it would benefit him immensely.
As for his gill problem, it could be caused by scarring from ammonia burns, parasites or even be a genetic defect. You can't really do much about it except watch his gills -- if they're red inside, they're healthy. Anything else is worrisome. I've had bettas with gill problems before and they've lived for a long time, healthy as anything.
It can be a little overwhelming when you get a betta that's tattered up, but they turn out to be the best fishies ever.
I'm rooting for little Shiloh! Good on you for springing him out of there.
Last edited by fleetfish; 10-12-2011 at 02:54 PM.