Though I don't get in as much diving as I would like, I do enough to second or third the inexpensive, little pain if you lose it, approach on this subject.
Actually, I have found several inexpensive knives to be great in the marine environment. IMHO, folders should be avoided for reasons of strength and reliability. All it takes on some folders in my experience is sand or other gunk in the liner to cause a locking failure. One handed or two handed opening is also not as graceful underwater as it is on land. Go fixed.
Frosts of Sweden make for excellent fishing knives. For just a little money you can get brightly colored handles, plastic sheaths, and afford to lose/break them by the dozens over the years with no tears shed.
In diving, depending on if prying is foreseen, I use either a Kabar warthog (prying) or a regular one (dubious shark defense and kelp hacker). Both are modified with the coated blade and the pommel airbrushed in a day-glo yellow marine epoxy I had made up so I can better see the knife in the long light wavelengths under water if I drop it. I have also made lanyards, attached through a hole drilled into the top of the guard, with a hangman's noose of reflective cord from the Campmor catalog. I then velcro the knife sheath (knives, sometimes they both go), to my calf. Ready to go to the kelp forests off of the Oregon coast and hang with the wildlife.
The coated 1095 blades can be made razor sharp, hold an edge better than most stainless and aren't as prone to rusting as people tend to think. The large fixed blade is also a usuable chopper in the kelp if absolutely necessary. Try that with a four-inch folder.
Remember you need oxygen and mositure in significant quantities to oxidize steel and form rust. Underwater, a carbon blade will degrade over time from dissolved oxygen in the water, but nowhere nearly as fast as you will. Oxidation attacks your blade far more rapidly in the air than in the water. The Titanic is still down there rusting away, all of the people are long since part of the environment, right? One could probably recover usuable steel from that 88 year old wreck today and make a knife out of some part of it. If your sheath has a drainhole and you can take but a minute a day to wipe down a coated carbon blade with a tuff cloth or something like that at the start and finish of the day, you've got yourself one pretty tough, yet eminently destroyable or "loseable" marine knife.
Save the hundreds of dollars spent on some "unrustable" or "unsharpenable" knife and buy a better outboard motor or wetsuit, regulator, fins, lights, cameras, etc. Why spend hundreds on a marine environment knife unless you use it everyday in conditions where you cannot maintain a "lesser" knife with minimal effort? Seems like a waste of hard-earned money to my bean counting eye.
If you are a SEAL, buy a SEAL knife or something high-end. If you are a recreational diver, use something you can afford to lose and take several copies on the boat. Losing a cheap, but tough as nails knife underwater and forever means never having to apologize to yourself for losing the expensive blade, having to save up for months on end, ask if your credit card has a loss protection feature, or having to cajole the wife for another couple of hundred dollars for a knife you already had to cajole her into letting you buy in the first place.
[This message has been edited by Oregon Duck (edited 22 September 1999).]