There is a discussion going on at the moment on Linked-In, about the definition of knowledge, with several people arguing that a definition of knowledge is fundamental to knowledge management.
Although I have a favourite definition, I find that I don't really use it much. It's very easy to get hung up on definitions, and many definition arguments are what I call "cul-de-sac" arguments, that take you nowhere.
I prefer to illustrate the difference between Information and Knowledge, with a story or an example.
Let's take the example of a map of mineral data, which you might use to site a gold mine.
Each point on the map is a datum - a mineral sample point, with a location in space.
The map itself is information; built up from the data points in such a way that it shows patterns which can be interpreted by a trained geologist.
However, to interpret that map needs knowledge. I could not interpret it - I am not a mining geologist - and unless you are a mining geologist, you could not interpret it either. The knowledge - the know-how, acquired through training and through experience - allows a mining geologist to interpret the map and come to a decision - to site a gold-mine, to take more samples, or to declare the area worthless.
In this example, the data, the information and the knowledge come together to form a decision, but the ignorant person, the person with no knowledge, could never make that correct decision.I find an illustration such as this, works better than a definition.