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I undo the knot or cut it off leaving a tail (about 4 inches) to weave in later. You can start the remainder of the ball of yarn by knitting one stitch with both the end of the old yarn and the beginning of the new, again leaving about 4 inches of the new yarn to weave in later. The double thickness of yarn doesn't show in the finished piece. There are other ways of dealing with adding a new ball of yarn but this is one way. If you leave the knots, they have a pesky way of working themselves to the front of the work or worse yet, coming undone.
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