found this solution..
To delete disk knight from your USB Drive:
1) go to My Computer and check which drive letter your USB drive was assigned.
2) click on start->Run, type "cmd", press enter
3) type "e:" (or whatever your drive letter is) and press enter
4) type dir /a:s, press enter. This will list the top level files on your USB drive, even if they are hidden. If you see knight.exe in the listing, proceed to step 5.
5) type the following
attrib -s -h -r knight.exe
attrib -s -h -r autorun.inf
del knight.exe
del autorun.inf
The attrib command removes the system, read only and hidden attibutes from these files so they can be deleted.
6) do another dir /a:s and make sure knight.exe is gone.
7) unplug the USB drive from the computer.
check to make sure Disk Knight is not running on the computer. Do so by opening the task manager (right click on task bar), go to process tab and make sure the knight.exe process is not there - remove the process if it is. delete c:\windows\knight.exe if this is present (make sure your folder options are set to allow viewing of hidden files).
Last, use regedit to search and remove registry entries refering to knight.exe.
9) plug your usb back in, should be ok
10) On any computer you are about to plug your usb drive into, check task manager for knight.exe or you may get infected again.
Good luck