Things to consider about knife defense:
-It is considered so difficult and unlikely because asking how to defend a knife attack is like asking how to be able to get in a fight and not get hit once. Most people at first consider a successful knife defense one that leave you completely uncut. Unless your opponent/assailant is a total tool, the fight will not go 100% how you want it to.
-If you are training martial arts for street defense and not competition, ditch the boxing-type blocks. What I mean is get rid of the punch defenses where you use your forearms and elbows to block the punch. Assume every punch is a knife attack, since IN THE MAJORITY OF KNIFE ATTACKS, THE VICTIM NEVER SAW THE KNIFE.
-The whole "Just run" thing has been going on too long in these forums. Yes, ideally, you want to run, but you're all assuming that our assailants are slower than us. If someone is pissed enough at you to pull a knife, I think there's a good chance they'd chase you. So while running is the ideal thing to do, shit doesn't always go your way.
-Distancing is going to be the key. You either want to be too far away from him, or you want to have a solid clinch position where he is too close to hurt you.
-I think the best stance to take would be a traditional Muay Thai stance. Weight mostly on the back foot, keeping your front foot light, hands out wide and halfway between you and him. However, I might turn my palms in slightly, to avoid taking slashes to the artery. The reason I'd choose this stance is because it's very defensive/counterattacking in nature. You pretty much eliminate his ability to come at you with any kind of hooking attack, since your forearms would just block the hook. His only option is to come down the middle. You can parry to a clinch, or since you know he's only coming down the middle, you can just circle away every time he moves his arm. The weight is off your front foot so you can teep kick him to keep distance, or give him a good shot to the groin.
-Ideally, though, I would not keep myself empty-handed. The above is just what I'd do if I had no other option. First thing I would look for is a chair, like someone else mentioned. The belt is also a great idea. Anything can be used as a weapon, but they are classified into two groups: damage and destraction. The belt, or the chair, can be used as damage weapons. You can hit him, block with the weapon, etc., and cause a degree of damage. I might use a hot sauce bottle, a rock, or a handful of change to throw in his eyes and destract him before either running or using an attack of my own.
First thing that comes to mind with a distraction would be brandishing a bottle like a weapon, then suddenly throwing it at his face (if you just picked it up and immediately drew back to throw, he might know it's coming, so he could just move). The moment after you throw it, groin kick as hard as you can, and either run or use seriously damaging attacks. Striking to the back of the head and spine with a lot of force should put him down and out.
-Again, though, a lot of times you don't even know the guy has a knife; it just looks like a haymaker punch. So I would take relatively the same approach for any kind of a street attack.
-If you know he has a knife, the mentality you should probably keep is "I'm probably going to get cut, but I will make it through this alive." Although it's obviously easier said than done, keeping yourself relaxed will be key. If you panic, you're just going to bleed out faster when you get cut.
-I'm not sure if I've ever heard this suggested, but try to reason with the guy. And the stance I mentioned above does not have such an offensive gesture as a streetfighting stance. Use defensive body and spoken language. "Alright man, come on, you win." "Hey man, alright, I was wrong, I'm sorry." Your hands are out, not clenched, almost like you're saying "Okay, okay, I'm backing off." As MMA enthusiasts this is hard to imagine for us; we are in such a testosterone-based sport that the thought of backing down can be sickening. But you need to really think about when fighting is worth it. No wallet, no amount of money, no possession is worth your life. And no, saving face is not worth your life, either.
We have trouble making a distinction between honor and face. Admitting you are wrong, or taking a submissive and persuasive action rather than an aggressive action has nothing to do with your honor. If this man is asking for your money, or if you just pissed him off somehow, you have nothing to prove. You really want to die because of a measly wallet, or an exchange of words? Fighting in this situation is only helping you save face, not honor.
If this guy has touched or threatened your family or your loved ones, if he's an enemy in war, then these are matters of honor. Those are things you fight for and risk your life for.
-Total and real-world self defense is as psychological and sociological as it is physical (if not moreso). Knife attacks do not just happen out of thin air, unless you're dealing with a psychopathic attack or assassination, which is rare but possible. You need to learn how to read body language, and how to assess situations. Be aware of where you're traveling, and try not to be alone in shady-looking areas. Don't go out and start shit because you're a martial artist, and don't instigate conflict. Bas Rutten made a great point in his streetfighting DVD. Whenever he's out in public, and someone gets close to him, he puts one hand to his chin and the other hand in the pit of the other elbow, while keeping his chin slightly down (like he's pondering something). It looks totally natural, but allows you to keep your hands up and chin down. While in this position, always keep an eye on what the persons hands are doing.
To make a long story short, high-percentage knife defense needs to be pre-emptive. Physical self defense (including running) must always be a last resort maneuver. Although they are last resort, there IS benefit in training physical self defense moves, because if something goes wrong, it's always good to know what will give you the best chance of coming out alive. When in a situation where your honor (HONOR, not face or "rep") is NOT at stake, approach the entire situation as defensively and submissively as possible. It's like the "Would you punch a guy with glasses?" cliche. It's a hell of a lot easier to stab someone who you're extremely angry at and he's got his dukes up, than it is to hurt someone who is just trying to stay out of the situation altogether.