The major difference between a 'stainless' steel and a 'carbon' steel is the amount of chromium in the alloy. Stainless steels and carbon steels have a similar amount of carbon (0.6 to 2%) in the alloy, so the term 'carbon steel' really means Chromium Free. With a free chromium concentration of over 12%, the steel is Very resistant to oxidation (rusting) and corrosion and can be called 'stainless'. It will still oxidize given the right conditions and enough time.
However, some of us like the 'feel' of carbon steel edges. High chromium alloys tend to produce larger crystals in the steel matrix, which, although they may enhance edge holding and hardness, may also result in a relatively poorer edge. The finer the grain structure of the steel, the better the edge. The balance of properties in any knife steel is determined by the Heat Treatment (hardening and tempering are separate parts of heat treatment). This is often difficult to determine, especially in a production knife.
I personally prefer carbon steel knives (5160, 52100, 1095, 1084, W2, O1, etc). I just feel these steels make a better knife. But they require more care.
Lots more care. Oil, wax, tough cloth, or the like is Required. And they will discolor and develop a patina over time. I think that is an interesting characteristic of a carbon steel knife. So for me, I'll take a carbon steel knife over a stainless knife Almost everytime.
There are some knife applications which are best served by 'stainless' steels. And many argue that modern stainless alloys, properly heat treated, offer working properties which are the equal, if not superior to the simple carbon steel alloys. Examples of these (sometimes called 'super steels') are 420V and BG-42. Stainless steels are not all the same. In the 440 series (440A, B, and C), the amount of carbon increases steadily. This produces more hard carbides (the stuff that cuts). 440C is a much better steel compared to 400A. Many manufacturers who only state that the steel is 'stainless' mean it is 440A. The most common carbon steel in production is 1095. I feel this alloy makes a much better blade than 440A steel.
It's a personal preference thing. There is NO BEST STEEL. Please looks at Joe Talmadge's excellent article and links about steel alloys in the FAQs section of this site:
Steel FAQ
Paracelsus
[This message has been edited by Paracelsus (edited 08-07-2000).]