Well, I'm going to have to disagree about the "velvet lining" not holding up well. I have been doing moleskin lined sheaths for about a year now, with no reported problems from customers. My lining is incorporated into the sheath at the time I form the Kydex, so, the adhesive qualities of the moleskin are being boosted by the temperature.
Yes, it is possible to disbond/damage the moleskin when inserting the knife, but, it is easily avoided with a bit of care. For double ground knives, the possibility is much less than for chisel ground blades. I am working on a design change that will virtually eliminate this potential problem, by preventing a chisel ground blade's point from being able to slide between the moleskin and kydex.
But, as I said, I have had no problems yet with my existing, "unprotected" design. Of course, if there were a problem, I could simply remove the moleskin.
In addition, I have found the moleskin lining to be much MORE tolerant of grit than plain Kydex-I have had blades scratched from KYDEX grit that got into the sheath during the finishing operations-since I added the moleskin, this has stopped.
If a knife is unsheathed many times each day (used frequently), then, a moleskin lined sheath might not be the best choice-the knife is a hard user, so, scratches aren't an issue anyway. Same goes for frequent exposure to moisture.
Tactically, the moleskin reduces the sound of the blade being drawn, and eliminates any rattle during normal carry.
I would recommend against any leather lining, as the likelihood of corrosion is increased.
Anyway, just my 2 cents.
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