There is a huge difference in the knowledge base of first-year students. Some were psych majors and took all the cores like cognitive, neuro, pathology, developmental, etc. Some were psych majors but only took some of the core classes (like me...for some stupid reason I took things like Psych of Religion and Psych of Urban Living...I think the class times were better - dumb decision). Others were not psych majors at all and only have the basics. The first year, especially, kind of levels off the playing field in terms of general knowledge. My experience thus far is that profs will often say "who's had a learning course?" and if there are even a few who have not, will then go over the basics (like conditioning, etc.) that others may not have had. There are lots of times where people have had no exposure to certain areas - don't sweat about that.
Back to the post on the amount of reading...my classmates, in our first year, did the outline thing. Personally, I did not find it very helpful given the vast difference between the quality and detail of the outlines. Some liked it, but for me it's better if I read it myself. That said, T4C is right that you can NOT do it all. What I usually do is start the semester doing as much of the reading as possible, as thoroughly as possible. Then, after the first round of exams you find out what "has" to be done and adjust accordingly. I also agree that my reading skills took a sharp increase after last year. I can get the main points of a journal article in <15 minutes now, where I used to take an hour to sludge through it. Also, I have found myself coming back to some of the textbooks and articles from last year, so it's good to at least skim them. They're usually valuable to keep or at least to hang on to your syllubi so you can look them back up when you want to refer to them.