I run a K&N on my quad. Every time I clean the filter, there is dirt in the intake side of the carb. And not a small amount either. I know it allows more dirt into the motor, but it is a heavily modified 2 stroke that flows alot of air. It also happens to be about $150 and a few hours work to rebuild the top end, so I'm not too worried about it.
My personal opinion about K&N's is that they flow like crazy, but have a marginal ability to filter out fine dust. If you aren't worried about engine longevity, and use a modified engine at high RPM's consistently than this is definately the filter for you.
I ran one in my Bronco II for a few years, and just like the quad I would find dirt inside the air intake tube. After switching back to FRAM stuff, there was alot less dirt getting past the filter. I will never again run a K&N filter on a daily driver, because 1-5 HP at redline is not worth sucking dirt into my motor. Paying $50 or more to shorten the life of my engine and only getting marginal performance gains sounds like a rather foolish idea.
Jared