Rust is rarely a problem for me. I try to keep blades clean and dry and treated. If rust does develop, depending on the type of blade and value, I deal with it accordingly. I have cheaper users like Machete's that I don't really even worry about, some good use and a quick cleaning will keep most of the rust in check. With a higher quality blade I remove the rust and re-treat with a protectant. Contrary to the practices of some, I store my knives in their sheaths and rarely experience any issues due to that.
As far as why they coat the blades... it's cheaper than polishing and protects the steel a little better when not in use. Rust isn't much of a problem on a user blade, but it's hard to sell a carbon steel blade if it starts to rust before it's sold or used. <img src="/ubbthreads/images/graemlins/wink.gif" alt="" />
I'm like you Jeff; I'll store my blades in their sheaths as well. However, since I go on tour from 6 to 9 months at a time, I tend to take a little more precaution. My knives are stored in a converted gun cabinet, with a dehumidifier rod installed, to prevent any possible rusting from ocurring while I'm gone.
My cheapies and users aren't so big a deal if they show a little rust, so long as I'm around to check on them from time to time. When I'm gone for more than a month, I like to have the above mentioned setup going, so I don't come back to a huge job of cleaning all my knives. If they all showed rust signs, the cleaning would take me a straight week at least... I own that many knives and axes! <img src="/ubbthreads/images/graemlins/crazy.gif" alt="" />
