I just read that FUBAR wrote it is supposed to be an engine feature, but I'm almost certain this light wasn't included at all in the first versions of the mod, because I remember complaining about it at the time 
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The flash-on-warp thing was actually introduced for the Freespace warp effect. I realized that it could go a bit of the way towards simulating the B5 jump point flash, so I just inserted the same effect... originally created by Bobbeau IIRC (since it was he that created the SCP addition). Now, in the show, the flash sort of opens at where the mouth of the cone would be, and traverses down to the tip of the cone, as the jump point expands. There's also a flash just where the jump point disappears when it closes. We can't simulate the effect to THAT degree of accuracy, without some significant code changes, or perhaps scripting... which to my knowledge, isn't included in TBP. The effect was added into TBP at about 3.3 or 3.3a.
There are separate keys for trust up/down/left/right but they do nothing. How do I slide like in a FPS?
First of all, you may have simply not bound the controls to any button or key. Secondly, for ships like the Starfury, side, up/down, and reverse thrust aren't very powerful, so you may not be noticing any effect because you're expecting something bit, or you aren't holding down the control long enough to notice. Also, you may not be aware of the "Glide" feature, which I believe is included in Zathras. It allows you to head in a direction, then hold down the "glide" key (that you've bound to some key of choice) and turn your ship. Your fighter will continue in the same direction and speed that it was when you activated glide, but you'll be re-aiming your fighter, so you can fire on a cap-ship as you pass by it.
But calling it still a demo after all this time seems a little bit strange to me. If the campaign is prolonged it can be called 2.0 or something.
Because its not a full campaign. The closest thing you'd be able to call it is a mini-campaign, and there's little point in renaming it, because it could get confusing for people such as yourself who played the original Demo, and think its something new because its not a "Demo" anymore, only to find out its the same thing you played earlier, and get pissed off.
Why is it called 3.4b then? What does the b stand for? Usually it stands for beta...
Actually, although I wasn't part of the team for 3.4, the "b" addition likely refers to a problem being discovered with the 3.4 release, so a patch was added to fix the problem. Then, the 3.4 and the 3.4b patch were included in the same file download for simplicity. That's what I'm guessing, since the same thing happened for the 3.3 release.
Still without any readme I extracted the files into the main folder where other similar files are. It seemed to work besides that I couldn't access my pilot anymore which is why I reverted to the original version for now. A installer should definitely be considered for Zathras 2.0, if you can't change the core files why not merge it with the The Babylon Project Campaign Pack 2.0? At least for the DVD 2.0 everything should be together 
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I can't really speak on the steps of the install, but as it was said, the Zathras packages are a mod for TBP. Its somewhat of a touchy subject, but there was some intense debate on whether TBP should be considered final. Some said that we needed to finally declare the mod complete, partially to make it easier to make new campaigns so both new and old ones could be brought to a specific standard and leave it at that. On the other hand, it was felt that with the Source Code Project constantly improving the engine itself, and with features being both added and altered in the process, work on TBP should continue indefinitely, ensuring compatibility with latest SCP builds, and to take advantage of new features. The debate was... heated, and ultimately led to the TBP itself being declared FINAL, while those team members who wished to see more improvements and ensure continued compatibility, kept their work going by starting the Zathras project. Just as with Freespace, the core files of the game are FINAL, and a group of talented individuals are creating the MediaVPs to take advantage of new features and improved effects and models, TBP 3.4b is the final, while Zathras is the equivalent of the MVPs. For this reason, Zathras and TBP itself, MUST be kept as separate items. To do anything else would throw off the balance and agreements of the team members, both new and old.
I hope this helps somewhat.
