VW- First of all, see if you can procure some of the BSA's books on knife safety, especially the standard Handbook. A lot of useful points are made in those. They definitely helped me when I taught knife & axe!
If you can't, I can help. First of all, you must teach them to respect what a sharp knife can do. How you do that is up to you, I've found that a simple reminder that knives cut steak, and humans are just steaks usually suffices.
The knife is a truly brainless and obedient object. It will cut anything and everything you place in front of it.
Make doubly sure to reinforce that a sharp knife is safer than a dull one. Ask some of the students who shave which they prefer, a dull razor or a sharp one.
Lastly, to reinforce what Arachnid said, and elaborate: A knife is a tool, not a weapon. Using the knife as a weapon or in any patently unsafe manner will get it confiscated. I've seen a few nice blades tossed in lakes over the years, and it makes a great impression.
Take from that what you will. If there's anything else, feel free to ask.
Keepin' it real...real sharp, that is.