This filter is a very close match to the Mobil 1 filter, which like this one also uses the original "performance" version of the Champion Labs design. The only unique attribute to this filter is the nut welded to the back of the can. This may be handy during removal, but it does increase the overall length of the can which can lead to clearance problems if things are already tight. They make oil filter wrenches in various styles for a reason. The K&N is an expensive filter for what it is, and you can save $2 by getting the Mobil 1 instead.
K&N air filters are fabric filters with large openings between the woven threads, that allows higher air flow, but would also allow more dirt to pass through them normally. BUT, it doesn't allow more dirt to pass through them because you oil the fabric and the oil, by its very nature, attracts and catches the dirt and holds it in the fabric.
I haven't seen any real evidence K&N filters do NOT protect engine adequately. I have seen tests that have shown some evidence that cloth/oil air filters do let more fine dirt pass then typical paper air filters. That doesn't necessarily mean your engine is NOT protected well enough if you use K&N. K&N usually does flow more air than typical paper and often will give you a bit of a power boost.
I don't see how that concept transfers over to an oil filter, the K&N rep may just have meant that K&N Oil Filters, like their Air Filters flow more while still filtering as well as traditional filters.
Only thing I have heard for K&N oil filters is word of mouth anti-dotal evidence, i.e. people say they are great, the company does have a good reputation and is trusted.
I have 200k miles on my Neon R/T using a K&N air filter with a CAI that places the air filter just above the road, where there is lots of dirt. It still makes just a much power as when new, which would NOT be the case if the air filter was letting lots of dirt into the motor. Yes, I'd say a good quality paper filter is probably the most likely to keep the most dirt out of the motor, but if your willing to risk it for maybe a few extra HP, I wouldn't be worried about using a K&N filter, as long as you clean it and re-oil it often enough. I have NOT heard of anyone complaining of engine damage because they used a K&N air filter.
Oil Filters, personally I use Hasting Filters and I have cut them open and found them to be remarkedly similiar to Mobil1 filters, the Hasting actual had more surface area to the filter media. Its hard to tell the quality of filter media by appearance.
Mobil1 and K&N I'm sure are great filters, only thing to consider, are they worth the price when likely Wix, Purolator and Hastings are protecting as well for less money? I don't think anyone could answer that definetively though, it would just be opinion.