Young bushman, it's a type of knitting, you do it with a hook (crochet). I can't remember exactly how it's done though.
What an explanation in a shop said (a page printed from the victorinox site or something like that), is that it's for carrying things...not so usefull for shopping bags, but if it's a box or something with a thin string round it, it's much nicer using the knife's hook than having the string digging in your hand....
Edit: oh well, Adi beat me to it, will teach me to stay on the reply screen for half an hour while I do something else :roll: