Flare ups.

What was your daisy wheel set at? Opened up at all ?

Flare ups are from a lack of oxygen and then the sudden rush inward, more fire than fuel basically, open bottom vent completely and remove daisy will to help decrease the sudden rush of oxygen into the fire

I have a dumb quasi newbie question. If you want to do a direct cook like chicken for instance, how do you catch the fat drippings without the place setter and a drip pan?

Basically you don't-so most go raised grid direct and then the occasional flare-up really has no impact on the cook.

You can always throw it on direct for a while at the end to get crispy skin.  You want to do it the easy way - first indirect, catch most of the fat and don't worry about it, then when it's 15F or so below your target internal temp hit it direct and babysit it. 

Most of the fat will be sequestered in the drip pan (which you'll have removed) and you'll have less of that bad fat fume taste.  Water in the drip pan keeps the drippings cool and in the drip pan.

I seem to be getting a soot or burned smell and taste to my direct cooks. Lou can you explain a raised grid?

Raised grid is the term used to elevate the cooking grid above the "normal position " atop the fire ring.  The grid generally ends up at felt level or above-means to accomplish can include buying another (usually weber) slightly smaller grid and then placing fire bricks, empty beer/soda cans or using bolts and nuts with washers on the main grid and putting the other on top.  This gets you into the raised grid cooking style-there are after-market products the will achieve the same thing for major $$ which you may want to explore down the line.  You may try the search function to see pics of some of the set-ups described above.  Really makes direct cooking a whole lot easier to control.