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The knock sensor is a microphone.. two of them. They listen for pinging from using too low of octane gas. If knocking/pinging is heard, the PCM will get its spark advance information from a low octane table as opposed to the normal.
They are located under the intake manifold. If you picture an old valley-pan, its sort of like that but not quite. Anyway, its easy to get too.
Not easy to get to, you have to remove the intake manifold. The old sensors were on the OUTSIDE of the block-MOSTLY east to get to (not all). There are 2 inside the LSX blocks for more accuracy ( A front and rear sensor and a connector to the back of the block).
There under the two rubber plugs. The factory plugs are NOT sealed very well and if the engine is hosed off, the wells will fill with water and destroy the sensor/connectors.