What is the limit of what you are permitted to put in this section on the ERAS CV? Can you put a paper that you have finished and submitted to a journal but are waiting for a reply? What about works in progress? I have a copy of a friend's ERAS CV from last year and he included everything, works submitted and works in progress. He just specified this in parenthesis. What are most people doing out there? Right now I think that I am going to include submitted works but leave out works in progress.

yeah, I think "works in progress" is padding a bit. Nothing wrong with including "submitted for publication" or noting the current research you're working on under ECs (which presumably would include the "Works in progress" category).