A few notes on my experience:
1. What kind of knife you can carry onto an airplane is a decision of the airline, not of the FAA. United Airlines, for instance, says "no serrations, period." Others are less strict. Security makes their decision based on the rules of the airline whose gate they are guarding.
2. Generally, if you are carrying a knife, and it is confiscated, they don't just "take it away." They will instruct you to go the airlines desk, and have it checked in as special baggage. This means that it will fly in the airplane's hold in an envelope with your name on it, and that you can pick it up after you arrive at the "special baggage claim" desk -- the same place you would pick up, for instance, a pair of keys. If they do try to take your knife away, just ask if you can check it in with your airline, and then go do it. (Sometimes, they will walk you over to the desk and stay with you until they are sure you have done it.)
3. A knife is far less likely to be confiscated if it is in your carry-on baggage than if it is in your pocket. This is particularly true of serrated blades. The X-ray machine does not make it clear that a knife is serrated, so if the knife looks small enough, it will generally pass through, serrated or not. However, if you take a knife out of your pocket when passing through security, they will surely open it, and get scared by any serrations.
4. You can also always try to go through a different security checkpoint. Once I was stopped at the checkpoint, and told I couldn't carry my knife through. Even though I was boarding a plane, I told security that I was just picking up my friend from an incoming flight, and that I would wait just wait for my party on this side of security, instead of going to the gate. They were satisfied. I then wandered over to another security checkpoint, and this time, my knife made it through.
[This message has been edited by baja311 (edited 03-15-2000).]