Bosse,
1) Never seen or heard of the Illegal key characters error before. From a quick Google search, this seems to be a response from JHackGuard. Do you have this installed on your site, and if so, can you disable it temporarily to test? If that fixes it, you may need to look if there are some settings to skip JFBConnect, or other parameters that may allow data sent from Facebook back to your site to pass.
If that doesn't work, all I can ask for is super admin credentials to get in and figure it out. If you can Private Message me the details, that'd be great.
2) This definitely goes along with #1
3) In early March, Facebook changed their commenting system. Before, each page on your site was identified with a random key. With the new system, each page is identified by it's URL, which makes a whole heck of a lot more sense. There was a transition path that Facebook allowed where you could continue using the old key method, and we support that. However, it takes a bit of work to get setup as you'll need:
* Regenerate the key for any pages that had comments you want to keep
* Insert the comment box specifically onto those pages using the key. The {JFBCComments ...} tag works, but the Content plugin to automatically inserted the comment box does not.
We can certainly help with the above points, but be aware that the old method, according to Facebook, is deprecated.. which means that support for it could be discontinued at anytime leaving you, again, with no comments. The new system is much more robust, and we don't anticipate Facebook changing it for the foreseeable future. While it's never good to loose comments, if you can make a clean break now, we'd recommend you do.
4) Not sure what you mean by "settings for comments". There's still quite a few settings we have available for the Comments block. Again though, the comment mechanism was changed quite a bit in March by Facebook, so some of the options have changed. If there's something specific your missing, just let us know and we can let you know if it's still possible or a suggested workaround.
Thanks,
Alex