??? Did you try reading the Help files in F12? How about going to ChessBase.com and checking out the tutorials?
I've used F12 for a few yrs and haven't found it to be overly difficult to work with. I used it to annotate all my games for quite some time but switched over to ChessBase 9 DB basically just to insure that I was analyzing my own games in progress with any engine(s) turned off by default, other than that I didn't have any problems with F12. Now I use CB9 and I think it has all the stuff you want (except a pricetag) maybe Arena or Winboard (both free) would work for you? You can load engines in them as well.
I supposed you could download freeware such as Arena and/or Winboard, install free engines in them such as Houdini, Stockfish,Firebird etc. and see if you like them better than F12...OR you could read this first:
http://www.chessbase.com/newsdetail.asp?newsid=6105
I want to use Fritz 12 to setup positions, play both sides and also make annotations (arrows, boxes, circles, etc). Can it do that? I am pretty sure I've seen someone use it that way, but I don't know how they set it up or what function they may have used to do so.
I tried to turn off the engine and that gets you part way there. Their board setup screen is still terrible in that you can't flip the board to set things up from black's perspective. Yes, you can trick it but it is a pain. That aside, not sure how to get into full manual mode and then be able to annotate both graphically and in text.
Should I be using a different program?