I'm not exactly the DM, so take everything with a gigantic pile of salt. Also I'm sorry for sort of responding for you Lemunde, I don't mean to step on your toes:
1. It's a small knife, I'd allow it as a dagger as few inch long butterfly knife all the way up to about 1 foot blades could fall under the category of dagger.
2. I'd venture a guess that it's a horse they expect returned unless you spent some gold to purchase one yourself. Equipment provided from your class/background should contain something around 10 days of rations, 10 torches, and a few other misc. stuff.
3. If I recall correctly, Lemunde said that we are using encumbrance, but any adventurer's pack or the like you get from your class/background doesn't weigh the 50ish lbs. despite all the equipment it provides.
4. We probably should keep track of these items, as I think it forces us to use limited resources as cleverly as possible.
5. During character creation I'd rule that some items can be traded in at full price, but once the game starts merchants will buy at half price or less
Again, I'm not the DM and my opinion is far removed from Lemunde's response. Honestly, I'm answering these questions because I know that my other group will have similar questions, so this is more for getting ready for these DM questions when they come up.
Pretty much. For encumbrance it's more like if you pick something up that's obviously too heavy for you you'll be encumbered. I prefer to handle things like that on a situational basis rather than constantly keep track of every feather and pebble you happen to put in your pack. Items can be sold for half price but you always have the option of haggling.