Character build is pretty simple - choose an occupation and give your character a name and description. Then assign 7 points across Brawn and Presence (max 6 to any one), then assign 9 points to six skills. You start with a base 500 fame.
The default occuption, as you say, is
knight. Knights need at least 1 rank in each of Arms and Riding; start with a coat of arms; and start with a standard set of equipment (arms and armour, horses, fine clothes, some coins). Because being knighted is worth 300 fame, a knight PC starts with 800 fame.
The "advanced" rules add skills to the list, and allow other archetypes. A squire or man-at-arms also must start with Arms and Riding, starts with lighter armour, no fine clothes and less coin. One of the knight PCs in my game started as a squire before being knighted by Sir Lionheart - the player wanted a backstory (being the son of a wealthy town family hoping to get ahead by marrying into the nobility) which didn't suit being a knight.
Other "advanced" archetypes are vikings (similar gear to a squre, must have Arms and Shiphandling), monks (little gear, must have Oratory and Read/Write Latin), merchants (modest gear including some pack animals and their load, must have Bargaining and Money Handling), and hunters (simple gear, must have Hunting and Naturalitie). Further possibilities that are flagged but are said (p 58) to be "not always appropriate" include peasants (very little gear, must have Crafting and Farming, may not have Riding or Arms at start), slaves and thieves (GM left to work out the details).
Because PC build is so straightforward, it's easy to come up with other archetypes. When one player wanted to play an itinerant performer, I could easily indicate Poetry/Song and Dexterity as two require skills, leaving the player to sort out the rest; and come up with some starting equipment (a little bit of money, a suit of colourful clothes and some juggling knives).
Page 58 has the following advice: "Pick an occupation that you think will be amusing to play, but pick something reasonable and appropriate for your Chief Storyteller’s campaign setting." Page 59 goes on to discuss playing "exotic" characters (eg "a Chinese martial artist, an African witch doctor, an Aztec maiden, and a Mohawk warrior") and gives advice on how to handle female characters within the context of a pseudo-historical game (the player of the performer was motivated to play a gender-ambiguous character in part because of irritation at the book's approach to female PCs).
So anyway, as you've probably worked out by now, the system limit on archetype comes out of the skill list (which in turn reflects setting and genre). In particular, there are no sorcerous skills - Alchemie (p 60, "[a]lchemical creations never violate the laws of science as we know them, though the alchemist and the user of the creation may firmly believe that they do"), Lore and Mathematics are as close to a D&D-type sage/wizard as the system gets.
Pages 50 and 52 say the following about magic in the game:
Storytellers must determine how much magic will exist in their campaign. Always reserve the right to use both real and pseudo-supernatural creatures, spells, and charms. Consistency is not necessarily absolute: Fake magicians would certainly exist in a realm where real magicians thrived. . . .
[T]he existence of powerful magic ought to be a rare and unusual event, concentrated in the hands of specialists like Morgan le Fay and Merlin the Magician. Note that there is no magical skill available in the Adventurer creation process. This ensures that only you, the Storyteller, have access to effective magic in the game, should you want it. . . .
The Storyteller should determine how real monsters are in his campaign. As with other supernatural events, the line may be crossed back and forth with different stories. The existence of both real and fake trolls, for instance, will keep Adventurers cautious until they determine whether the monster can be defeated by simple force of arms, as in the case of fake trolls, or whether they must resort to trickery. Trickery is the only solution against magical monsters which are too tough to combat directly.
I would say that my game has been at the more magic-heavy end - in the first session there was the Wild Hunt, in the third session the somewhat supernatural abilities of the crowmaster, and in the fifth session the evil spirit bound into the crimson bull and then the ghost, and the blessing of St Sigobert that helped in both situations. The only pseudo-magic has been the trial of Lady Violette's young brother for sorcery in the second session, which had the cat being called as a witness (it had been said to speak the boy's name, "Hugh" - as the player of the squire commented, it was lucky for the accusers that the boy's name was not Reginald).