I don't knit a whole lot when I'm in public. I have nothing against it though. I knit in the car sometimes when the scenery is not compelling. You really have to consider the type of knitting. I don't try to knit something that needs concentration when I'm supposed to be listening to my husband talk ;-). I think the reason I don't knit a lot in public is that I have lots of time to knit at home and more social moments are rarer. People who have little time for knitting, I don't blame them for trying to squeeze it in whenever they can.
Someone said you should be able to knit anywhere you could read. If the knitting is simple I don't find a correlation there. People don't usually read and watch a movie at the same time, but this is very easy to do with simple knitting. I recently went to a series of health classes that lasted over 2 hours each. I didn't knit when a live speaker was talking and people were interacting, but during the long DVD lecture, I knit. Room darkened, I don't click when I knit and I was in the back of the room. It was simple knitting and I looked up when they were showing an important chart or graphic and off and on the rest of the time. I think many people can knit during lectures (well chosen knitting). Not bothering other people would be the big consideration, not if the knitter could do it.
I liked Steve's list of where not to knit. LOL