Ok, a couple of quick thoughts here. Most higher end Nikon bodies with the better AF systems are rated to be able to work at F8. However in practice once you get to this point unless you have pretty good lighting the AF system will be slower, and have a tendency to hunt more. As the lighting starts to fall off a bit the AF systems gets dodgy, sometimes even refusing to lock at all.
Teleconverters do get a very bad rap because a lot of folks who buy them initially really don't understand their limitations or proper operation. If you get a cheap teleconverter, yes you will most likely end up with a noticeable IQ loss. If you use any teleconverter with a low end lens, yes again your IQ is going to be noticeably affected.
A good teleconverter on a lens with really good IQ that is fast enough (F/2.8 preferable for 2x, F/4 for say 1.4) will produce very good results. Yes, if you pixel peep the crap out of stuff you can probably find some minute differences, especially in the corners. However pixel peep any shot enough and you can find problems, if you really want to find them.
So, my recommendations on TC's - use them with fast lenses of good quality. If you need to shoot just a tad bit wide, crop out the corners since that's usually where any IQ loss will be at all noticeable.