Knock sensors are difficult to implement and only effective within a certain range. Typically you have to ignore them after 4500rpm as top end engine clatter gets too noisy.

The Jacobs units that John Parker stocks are the only good generic 'active'systems I've seen. They actually retard individual cylinders by keeping track of engine position and associated time windows where knock might occur. I've never used one but all of the info I've seen about them looks pretty righteous. $500+. Knock sensor screws into the coolant drain near the back of the block on the manifold side.

Knocksense is the next good option. http://www.viatrack.ca/
This is a passive system that lights up an LED when knock is detected. It has adjustable sensitivity and it is substantially cheaper than the J&S and lots of people seem to be happy with it. $60 + cost of sensor. The guy who makes it has developed a circuit designed to work with megasquirt ECU's if you want to do automatic knock-retard. Unless you are running lots of boost on the ragged edge this is a great option. If it lights up, let off the gas.

I haven't used either of these systems, just passing along what I know about them.

steve