Sway backs are not a deformities in themselves, and they are not painful. However, 18 years old and already that deeply swayed does bring some questions. Was he ridden a lot as a young horse, or by a very heavy rider? Ask your grandpa is he remembers when this gelding started getting his sway back. If it wasn't VERY recent (last 6-10 months) then I'd say that there is a good chance that his back is weak. The fact that it's so long is also a con.
You say that he tends to buck. Often, bucking is a sign of pain. I would definitely have him vet checked/have a chiropractor out before you start jumping him at all, and make sure you condition condition condition him. He's getting into the later years and he's liable to be fairly stiff from not being used often, and he looks pretty pudgy. He probably needs 2-3 months of walk/trot/minimal canter before even thinking about cantering.
I'm not saying he won't be good enough, he may be very good. But it could be painful.
Is there anyway the sway back can be 'cured' with pads and stuff?
that's just what it is. A 'cure.' It's like taking an artheritic person and doping them up enough to work heavy machinery, or giving someone with a screwed up back a brace. It masks the problem. Talk to the chiropractor. See if he needs adjustments, and keep on top of them. Even with a weak back and the sway, if you're willing to condition him, get him adjusted regularely, and listen to what he enjoys, I'd say go for it. He does look like a sweetheart, and deserves more than a pasture puff life.
It's not the sway that's worrying, it's what caused it in a lightly ridden horse just coming off of his prime.
And don't get down if he can't jump. There are plenty of classes that he might absolutely love...even if it's just gymkhana!