Knowledge is always there. Even in case of external objects, there is the knowledge of intellectual understanding of the object, the knowledge of experience of the object, and the direct perceptual knowledge of the object. Consciousness (i.e. "I"), although it appears as all objects, can never be directly known as an object, let alone understood or experienced (found). So, I think the terms are defined pretty well.

The irony of all dualist schools is that each one of them is basically trinitarian. There cannot be true dualism because two, as postulated by all dualist schools, already require space and/or time. It is true that in e.g. deep sleep there is "I" in infinite nothingness (space) which could pass as "true" dualism, but it is still "I" seeing "nothingness". Thus identification with anything observable (social identities, body-mind, even void, etc.) is an error (or illusion -- not in the sense of nonexistence but appearance). Dualism is simply incomplete knowledge. But since Hindu society is rather liberal in terms of religion and philosophy (as is also Western philosophy), you have still all those dualist schools present and intact. You will find even hard core materialists among those schools, and I doubt you would try to vindicate their ideas just because they live in the same Vedantic substratum.

And you can see this documented also in accounts of Buddha's study with his sramana teachers who were clear dualists (for a more "recent" example -- Patanjali is the epitome of dualism). Yet, Buddha correctly saw that what they teach is not the whole picture and so he pushed even further.

And I could go on and on.