Hi,

when setting the autopilot (KFC2000) of the Aerostar700 model to a fixed
altitude it oscillates a lot around that altitude and the altitude control
 takes a long time to become stable.

Do you know whether it is supposed to work right? Some models may not have correctly tuned autopilots, so they do not function correctly. You might try asking on the forums, instead.
 
On the console I get the following error continuously:

AL Error (fx): Invalid Value at pitch and gain

Since this is reported as an "AL Error (fx)", I highly doubt it has to do with the autopilot (although this message otherwise could be from the autopilot.) Instead, it is probably an OpenAL error. This was probably caused by the new sound system that has just been implemented.

I hope this helps.