If one of the players wants to create a Knight of the Cross, that shouldn't necessarily present a huge problem so long as all the players work together.
For the other players, that would mean not creating total monsters. We see that Michael is pretty tolerant of anyone who doesn't hurt people. The other players simply need to make characters who don't tend to hurt people. That means that any White Court characters need to avoid making people into thralls, Wizards have to not use their power against people, etc.
For the player of the Knight, that means extending that tolerance. Don't pounce on every little thing and insist that everyone behaves by the Knight's personal code. There are lots of tolerant people of faith in real life; it's not a huge stretch that they exist in a fantasy game.
As for creating stories, start with the formula from the books. There's a problem, whatever it is. For some reason it can't be solved in the most straight forward fashion. Then things start going more wrong than they were already. Throw in the final twist, and there you are.
Take my example story from above. The problem is that there's a murder with supernatural implications. The complication is that there are federal and local law enforcement agents in the area looking for unusual characters, and the PCs are unusual characters. Ergo they have to keep their heads down and avoid the law.
Now things need to start to go wrong. Research shows that this murder is likely one in a series of five. Whoever is killing is sacrificing to some nasty demon, and the demon demands five murders, each of which provides an organ. The murders must follow a certain pattern of days, and that means that someone's going to be killed tonight. Evidence leads to the campus... which happens to be a White Court hunting ground, and with the war going the way it is, you absolutely cannot piss them off.
The final twist is the FBI showing up at the characters' house, convinced that they're the killers. See, the real killer spotted the characters snooping around and decided to throw them to the cops. But the only one they mentioned their names to was that really helpful pre-med student. It must be him! Oh, but we've got to escape SWAT, the FBI, and anyone else who's throwing tear gas through the windows.
Just remember that complications shouldn't prevent all forward movement. Some of them should even be clues.
Hope this helps.
