A free-space contra-propagation configuration is implemented and pump-probe studies are undertaken in order to study polarization-dependent gain dynamics in bulk semiconductor optical amplifiers (SOAs) and their application to gain and polarization switching. The polarization dependence of the gain compression shows that the co-polarized case, in which the pump and probe are TE-polarized, is the optimum for gain switching. When injecting light polarized at 45 degrees, an additional contribution due to the presence of rotating fields is observed, and the cross-polarized case is found to be the most promising for polarization switching. The potential for all-optical switching based on nonlinear polarization rotation (NLPR) induced in the SOA is then assessed through characterization of the dynamics of the state of polarization. It is demonstrated that by careful selection of the orientation of a linear polarizer in front of the detector, it is possible to reduce the recovery time from 100 to 5 ps. The improvement comes about from the selection of the intraband fast gain recovery dynamics. Polarization switching offers potentially faster switching times compared to gain switching as well as an extinction ratio improvement of similar to 10 dB.