What does "known file types" actually mean?
What makes a file type "known"?
Can I explicitly add or remove extensions/types from the list of "known" file types?
"Known" is loosely used there. It is saying that there are globally known file types, such as exe, zip, cpp, txt, etc. And then there aren't (like .blah). That being said, the registry still shows a .blah (just unassociated with a program) - so all it's saying is show .* or not.
Of course, you can change or edit those in the Registry (warning, you can do a lot in there that is bad for your machine, so proceed with caution). The Microsoft Development Network has a good summary of what/why/how/etc.
Known file types are those for which you have a default application that knows how to open that type. If that application has an icon, that's the icon you'll see for that file. For example, it knows that it should use Word to open a
When you install a new application, it usually registers itself as the default application for the types of files it knows about unless you already have something else associated. That's usual way that new types get added to list of known file types.
The other way to add to the list is to create a new association manually by right-clicking on a file of that type, then choosing "Open with...", then "Choose default program..."
You'll always see the unknown file type extensions. But this option trims off the ones like