FSO 3.8.0 (and all future releases) uses a new settings directory in %appdata%\HardlightProductions\FreespaceOpen. Your pilot files will be stored there as well. You can copy your old files into the new folder if you want to.
Knossos doesn't have lighting presets since none of the existing ones work with the new renderer. As far as I'm aware, there is only one preset so far for the new renderer.
Which custom files are you talking about? The only new file type are the mod.json files which are generated during the installation.
because I *have* everything that I need all set up and ready to go.
Then why are you complaining about Knossos? Noone's forcing you to use it.
I no longer have the time to spend 3 hours troubleshooting and uploading crash logs when something goes wrong.
That's exactly why Knossos is designed the way it is. The whole installation process is standardized and automated which reduces the possibility of stuff going wrong. Besides, Knossos uploads its own error logs unless you turn it off but I guess that's not relevant here.
And while Knossos has many fan campaigns available, it doesn't have them all. And I would have no idea how to set them up with this new system.
Sure but we have to start somewhere. Knossos already has a lot of mods/campaigns available and we have a guide if you want to add a new mod (and optionally upload it).
I'm really unsure what you're complaining about... either you're fine with the way things are in which case not much has changed or you want an easier way to install mods in which case Knossos is IMO the best solution we have. It's not perfect but then again it's something that was purely developed in the spare time of everyone involved.
Something that's been irritating me is that recently people have started to complain about Knossos (or certain parts of it) instead of asking if it could be changed. I'm open to different opinions and constructive criticism. Knossos would've never become what it is today without the great feedback, help and support that I've received in the past (holy crap, has it already been 4 years?! Time flies...).
Anyway, I value any constructive feedback I can get. It might take a while to incorporate the feedback (my spare time is obviously limited) but I try to prioritize important changes and simple fixes.
TL;DR: Knossos is a nice tool that seems to help a lot of people but also seems to upset a lot of (other) people although it shouldn't really affect you if you don't use it.