The events in the novels are canon, but don't use them (especially the older ones) as a guideline on the rules. Whether your characters would know anything about the events of those novels is another story.
Also, I was reading one of the novels, and an elf introduced himself to Dirk Montgomery as Quentin Harlech (but you could call him Quinn), and I got chills down the back of my spine. And this was even after Dirk had been thrown into the middle of events involving megacorpsm, national governments, great dragons, yakuza, and insect spirits. Even after he'd gotten personal calls on an unlisted number at a random dive from first the king of Hawaii himself, and then Ryumyo himself. I was not surprised, therefore, when Dirk got himself bagged by Telestrian, and the moment he mentioned that elf to the executive, she went pale, released him, and Telestrian pulled back from both sides of the conflict like it was going to go nuclear.
