Well, for those who don't want to go to outside links (there's always a few), Damascus is steel which is composed of of several different steels, layered and welded together. It may be left as a simple layered effect, or twisted and further deformed to produce interesting patterns. As a blade steel, it varies (depending on which steels are combined to produce it), but generally does not perform as well as the component steels do (although certain combinations have been reported to produce a micro-serrated effect as one steel wears faster than the other). For beauty, though, the only steel I think looks nicer is a blade I saw which was frged from an iron meteorite. To solve this problem, some have made what is called 'San-mai' damascus, where a piece of plain steel (whatever type you prefer) is sandwiched between two pieces of damascus. Except near the edge, the damascus is what is seen, but the edge perfomrs like one made of the inner steel. Also an option is using damascus for parts other than the blade; I'm having a pair of knives made with damascus bolsters.
Damascus is a beautiful material. If you want to buy a knife with a damascus blade, talk to some makers about how much of a performance loss any specific type of damascus is, and decide if it is worthwhile for the added visual appeal. You can also ask if they do san-mai, if that interests you.
--JB
P.S., for a nice example of san-mai, check this out:
http://www.bladeforums.com/ubb/Forum4/HTML/001094.html
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e_utopia@hotmail.com
[This message has been edited by e_utopia (edited 06-26-2000).]