ChessCaiisa,
The reason why it's okay for White to move his light Bishop around is two-fold. The first is that even though the Bishop moved so much, it still attacks very relevant diagonals where it is finally placed. The much more subtle but powerful reason why it's okay is that the Bishop moves constantly is because while Black develops all his pieces, they are awkwardly placed and do not attack the right squares. They are developed well, but still, White is able to control the center much more effectively. Black has to resort to moves like Na5 in order to advance his position, while White has a lot more options available and more space to work with. If GMs couldn't count on a slight advantage with the Ruy Lopez, they probably wouldn't play it.
Military_efficiency,
I think you're right in saying that the Bishops are more powerful than the Knights. Unless trading Bishop for Knight comes with an added bonus, i.e. an extra pawn or superior position, I'd probably want the Bishop nine times out of ten. In the Ruy, you'll often see the Bishop planted on b3 or c2 because Black is often smart enough not to give up an extra pawn. But when he does offer up Knight and pawn for Bishop, take it :)
In general, when a lot of pawns are on the board, i.e. 7 or 8, I like to keep a Knight around or both Knights as I feel I can blunt the opposing Bishops with my pawn structure and use my Knights to effectively hop around the board. But when the game is more open, Bishops all the way!
our coach likes us to start out that way but i tend to consider bishops too valueable to trade off and that tends to lead me to the four knights game.doesn't it seem more advantageous to have bishops rather than knights considering you can force mate with bishops?