Bardock,
In the case of the kitchen knives made with the sanwich of forge welded stainless around the VG-10 core like the Shun, the purpose is purely cosmetic. It doesn't hurt the performance of the knife. The VG-10 core does the cutting. Think of it as similar to the traditional Japanese kitchen knives made using kasumi construction, where the hagane is forge welded to a piece of soft steel or iron.
Some knife blades are made entirely of damascus. The performance of these blades is dependent on the types of steel used in the blades and the way in which they are forge welded. Some damascus blades are purely for appearance while some perform quite well. Some forge weld carbon steel and some other metal such as nickel together to make a very high contrast and spectacular product. These don't perform well. Others will forge weld two high performance carbon steels together and, while they don't look as exotic, they do perform well. It is, however, not reliable to try to judge the performance of a damascus blade by its appearance.
Thanks for the update on the Chrysanthemum.
Yes, Chuck, I was referring to the Shun classic series. Kai and Kershaw represent the distribution channel. Similar knives have the Kasumi brand on them and somewhat better ones are made by Hattori with their name on them. I see Al Mar is importing some as well. They appear to have the same steel as the Shun but handles and bolsters similar to Hattori. This type of knife is red hot in the kitchen cutlery industry at the moment. It helps explain how Japanese kitchen cutlery enjoyed a 300% sales increase last year while the European end of the business had a sales decrease.
thanks.