Psionics

At the request of another forum, I'm posting up this question and its answer. Hopefully it should clear up any confusion that may have resulted from the abilities.
Quote Originally Posted by Question
Does the Psionic Knack trait increase your maximum power level known?
The answer is that it does not; Psionic Knack's rules text says the following:

Pick a class with a manifester level when you gain this trait—your manifester level in that class gains a +2 trait bonus as long as this bonus doesn't raise your manifester level above your current Hit Dice.
It's a bonus to your manifester level, which is defined in the psionic powers section linked here as doing this:

In the event that a class feature or other special ability provides an adjustment to your manifester level, this adjustment applies not only to all effects based on manifester level (such as range, duration, and augmentation potential) but also to your manifester level check to overcome your target’s power resistance and to the manifester level used in dispel checks (both the dispel check and the DC of the check).
Maximum power level known is unrelated to manifester level, and instead is based off of class level or prestige class level:

Spoiler: Rules text quotes
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Quote Originally Posted by Psion maximum power level known
A psion begins play with the ability to learn 1st-level powers. As he attains higher levels, a psion may gain the ability to master more complex powers.
Quote Originally Posted by Psychic Warrior maximum power level known
A psychic warrior begins play with the ability to learn 1st-level powers. As he attains higher levels, he may gain the ability to master more complex powers.
Quote Originally Posted by Wilder maximum power level known
A wilder begins play with the ability to learn 1st-level powers. As she attains higher levels, she may gain the ability to master more complex powers.
Quote Originally Posted by Prestige class wording; taken from the Elocator
At every level indicated on the table, the character gains additional power points per day and access to new powers as if she had also gained a level in whatever manifesting class she belonged to before she added the prestige class.

Psionic Knack increases the number of power points you can spend on powers, the effectiveness of manifester level-based effects, and your number of bonus power points (which are based on ML). It does not increase your maximum power level known, give you more powers known, increase the number of base power points your class gives you, or give any other benefits from the class you applied it to.