So sorry to hear you're having difficulty knitting. I remember it being difficult for me when I first started, too. Over the course of several years, I learned the basics (and became somewhat proficient at them). It took lots of starts and stops and frustrating periods before I began knitting well--and then I discovered after doing the front and back of a sweater TWICE that I was twisting my stitches. So, yeah, I've been there!
What size yarn are you using? Perhaps it would help to use chunky light-colored yarn (but not the fluffy or fuzzy kind) and larger needles to help you better see what you're doing. Also, you might try postponing any projects until you've really mastered knitting well. I know I made swatches for a LONG time before I ever started on a project. It also might be an opportune time to learn how to fix some common mistakes; take a look at this videos and maybe practice on some swatches: http://www.knittinghelp.com/videos/knitting-tips
Let me also recommend using stitch markers (to mark off unique patterns, such as cables or repeats of lace) and a lifeline (http://www.youtube.com/watch?v=elJqui-bM-k
As for getting your yarn in knots, it's a good idea to keep it wound up in a ball (of some sort) even when you're ripping out a project. And if you've repeatedly knit and pulled out the same yarn over and over again, it's much more likely to form knots. Maybe use a fresh skein of yarn more often?