If you install the development version of knitr, just follow the instructions for installation in the README file on Github.
For this particular problem, it was caused by an insufficient version of the markdown package at that time, but now the new version of markdown is on CRAN, so just run update.packages(ask = FALSE)
and you should be able to install knitr from Github. You do not really need to know these details if you install from RForge as mentioned in the instructions.