Here is a very interesting video which discusses Knitout at length.
File extension: .k
Specification v0.5.3 can be found here.
Information from textile-labs is available on GitHub here.
The pyknitout wrapper is currently very barebones. Future work should include fleshing out more convenience functionality, as well as adding some basic extensions. This page shows the extensions to Knitout that are currently unsupported.