Would you recommend the sword path over knife feats and ambush feats?
The assassin is simply very feat starved...
No. For the Assassin that specializes in killing special targets, I would recommend the Sword feats over the Fencing feats; however, I'd likely take Knife Basics over Ambush Basics and both over Sword Basics (further reasoning below).
By their very nature, Special characters are hard to kill. Special NPCs can have huge stacks of vitality, so bringing them down quickly requires bypassing that vitality as much as possible. Far and away, the most reliable way to do that is with Terminal Situations, which may typically mean getting to your target while he is sleeping. But, since Terminal Situations are always declared by the GM, you would need a cooperative GM.
Another way to bring them down quickly is with critical hits that do enough damage to remove their wounds. This requires maximizing your threat range on your attacks which is one of the reasons I favor the Stiletto's 18-20 threat range. With damage of 1d4 + Dex Mod + Sneak Attack + Action Die that practically ignores DR, you should be able to drop most targets with a single Sneak Attack critical hit.
Which brings me back to my feat preference listed earlier. The quickest way to accumulate damage is with Sneak Attack dice. If you operate under the assumption that your opponent isn't aware that you are about to strike, you should be able to enter the Wicked Dance Stance before attacking. If you also have Ambush Basics, you now have 3 Sneak Attack Dice. The next feat I would look at could well be Ferocity Basics, which adds +1 damage per sneak attack die. Also, with Ferocity Basics, after you get a critical hit and drop the target, it's only a half action to do the Coup de Grace and make sure the deed is done.
After those 3, your main goal should be increasing your threat range on attacks. The easiest way is Misdirection Basics, which adds 1 to the threat range against Special characters.
Looking at the Origins, I am actually liking the Vanguard, which gives you Misdirection Basics. Pairing Impress with Resolve and Charming could both be really handy to infiltrate an area. The other 3 feats can be obtained at levels 1, 3, and 6.
If there is any chance that you will be fighting with allies, I would probably usually use the Assassin's bonus melee feat to add Darting Weapon. Once you are in a flank, your goal is to roll a threat more than inflict raw damage and more attacks makes that more likely.
As far as proficiencies, you definitely want Edged (forte) to use the Stiletto. A few tricks which could be helpful: Exploit Vulnerability (AC), Salt the Wound (after adding the bleed upgrade to your Stiletto) and Venom Master (if you want to poison the target).
To recap, 4 feats: Knife Basics, Ambush Basics, Ferocity Basics, Misdirection Basics
Superior Stiletto with the following upgrades: AP, Bleed, Keen
Assuming a +3 Dex and a flat-footed opponent, at level 6, you would have a 17-20 threat range that does 20 damage on average and you could add an action die if you needed more (1d4 + 3d6 (Sneak Attack) + 7 (Superior, Ferocity Basics & Dex Mod)). If he survives, he'd have to roll a fort to avoid bleeding and if he starts bleeding, you can Salt the Wound on future attacks for an additional 1d6 damage. If you caught the guy unarmored you may even be able to add Keen 14 to the attack with Exploit Vulnerability and force a save vs critical injury.
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