All this talk REALLY makes me want to catch up on the DVDs.
[spoiler]My interpretation was that Quentin knew who he was up until the point Barnabas visited him in the hospital after hitting him with the car. To me there just seemed to be a look of recognition on Quentin's face when he woke up and saw Barnabas (for the first time in 70 odd years), then cut away and come back and he's suddenly like Nope! I have NO idea who I am.
Also in the episode Barnabas hits him, or the day before a mysterious stranger walks into Collinwood and checks out Barnabas' portrait in the foyer. I only saw the episode once, like 5 years ago, but I'm pretty sure they were insinuating it was Grant/Quentin.
As for the kids being scared of Quentin, David was at first but then seemed to accept that this Quentin and the ghost weren't the same, then used Amy's fear as a weapon to tease her with. I love, love, LOVED the fact that Amy was much more on the ball about the situation and wished the writers had thrown it in a little bit more. I have to cackle and rub my hands with fiendish glee in the episode where she turns on the gramaphone while Roger, Barn, Julia and Quentin are all in the drawing room conversing. It bothered me a bit that Roger didn't react to the music as the others did until I just remembered he never heard it (to my knowledge) he was on a business trip for most of David's possession and evacuated the house shortly after arriving home. Loved the looks on everyone else's face though.[/spoiler]