I've always heard that K/N filters are good and add 5-10hp to boot. This true? ...or is this some myth that ricers believe in?

They will add a couple of hp due to slightly less restriction but their real benefit is long life and cleanability.
Changing over to a CAI with cone will gain you more hp.

ioxmo, can you put your year and trim level in your signature? We're answering your question 'blind' here.

The K&N really helps you to allow OTHER mods to work better. Opening an intake up, putting a smaller pulley on, doing the exhaust.....these are all mods to increase 'breathability' of the motor. A good air filter is critical in order to gain the most from these other mods. By itself, maybe only a couple hp, but it can help you get the most of other mods, possibly in the 5-10 range that'* claimed on their website.

Done and done