Editing that file will have no effect. It's more than likely just a record of the settings that were used for the last kernel compile (or at installation).
When you start to compile your kernel, if the file /usr/src/linux/.config exists it is used as a template for the settings that you want. "m" means module (this function can be plugged in and out of your kernel), "not set" basically means "no". After you've finished compiling, you should generally copy .config to (something like) /boot/config_version as a record of what you've done and as a template for the next time you want to tweak something.
What desktop do you use? For kde you have to tell it to remember the desktop arrangement at logout. Look in "Control Center".
All your hardware issues probably come down to picking the right options during compilation. Find out everything you can about your hardware, there are a lot of choices possible when you recompile, knowing about your hardware will help you a lot there.
John
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