so the knife tool in in 2.6 is broken, it does not give me any options what so ever
suggestions anyone... and if envolves reinstalling then how do i keep the stuff i have been working on....('
The knife is not broken. It just does not work the way you are accustomed to.
If you want the old system back, you are going to have to go back to a version before 2.63 when BMesh was added to Blender.
As for how much work you would lose... I dont know. Ive never tried it, though I believe you would lose any ngon information in your work.
If this is the case, I would try 'Trangulate Faces' on my work, save it, and try using that copy with the older version to see if anything was lost.
For knife cut tool hopefully there will be option for "edge Extent" and "edge Trim" to/by another edge... its so useful for precision modeling