I think people tend to underestimate how accurate you can be with a pencil. I use a 2H that is always well sharpened, and produces a line thinner than a 0.5mm mechanical pencil. As long you cut on the right side of the line, I think you'd need a magnifying glass to notice any difference between it and a knife line (a knife line only being as thin as it's bevels remember).
Having said that, the knife really wins out when you want to return to a previous location, such as dropping the chisel into the knife line on your last pass, where you're only moving a little material. Or dropping your knife into a knife line to butt up a square to a previous cut line. And then also the knife wall that MikeG showed, which allows you to drop your saw in to a channel, avoiding that annoying jitter when you're trying to start a cut. What I really like about the knife wall is that after you've made the cut with your saw, you can clearly see the difference between the areas that were cut with the knife (clean) and the areas cut with the saw (fuzzy). The fuzzy areas generally stick out a little further than the knife line, as your saw is never perfectly 90 (at least for me), so you can easily remove that bit of fuzz with a chisel, using the clean cut area of the knife as your reference.
The one thing to watch out for with knives is that it is all to easy to accidently follow the grain, rather than the edge you were trying to butt up against. I generally prefer a pencil here. Once it has drifted, you can't really correct it as you'll most likely end up widening the line. Remember, the first pass needs to be very light, the second a little heavier, and then after that you're usually good for going as heavy as you like.
