Knife works GREAT. You just have to use it properly.
1) Only works with 2D geometrics as the Knife Object (I tend to use rectangles or shapes that are combined into one surface)
2) The Knife Object must overlap the surface area it's going to cut fully. Usually when a cut doesn't work, it's because you didn't overlap one of the edges of the object you're trying to cut.
3) Only works in OBJECT mode. You get a couple of annoying dialog boxes if you try to assign the knife object while in surface mode.
Booleans...we'll see. I have to try the new version and see what improvements have been made. Based on the track record of this AC3D team, I predict success!