There's really nothing too special about Knave. But it's because of this that it might just be one of the greatest additions to the OSR that I've ever seen. A lot of brilliant OSR games out there do one of three things: emulate the wheel, attempt to reinvent it, or a little of both. (read "wheel" as D&D) Labyrinth Lord? Emulation. DCC RPG? Reinvention. LotFP? A little of both
Here is what I believe lies at the core of the OSR: There are as many unique systems as there are gaming groups. Every group has different tastes, and the easiest way to match those tastes is by taking away or adding rules to the game.
However, all of the games out there, including old-school D&D, have assumptions built into them. DCC RPG assumes that your gaming group would rather have a crazy romp than a serious hexcrawl. LotFP assumes the opposite. ACKS assumes you'll make it to the later levels to use its subsytems. Even OD&D had the assumption that characters should be differentiated by classes/abilities. These assumptions are what create followings behind certain games. But what if there were a game that focused on having as few assumptions as possible?
In comes Knave. It doesn't try to emulate or reinvent the wheel. Instead, it seeks to be the axle that turns the wheel. The easiest way to explain Knave is to say that it just "is". It's like if you took the math problem 1+3=4, but got rid of everythning except the 1. Knave is the integer of role playing games. The lowest common denominator. You can't really say it's objectively bad, because it possesses no inherent meaning; that's something you and your group will flesh out as you play.
To wrap things up, I'll say that fantasy adventure games are meant to inspire wonder in players because of all the choices and freedom. Knave still does this. But it inspires Referees too because there's so much freedom to hack and add to the system.
Knave need not be your system of choice, but if you're interested in crafting your own game from the ground up, save yourself some time and use Knave as your foundation.