You can take them in your carry-on. Whether you can use them on the plane is entirely up to the airline, and it can vary from flight to flight - the flight attendants have the final say and it depends on THEIR comfort level. I've never had mine taken away on a domestic flight - but then, I've never asked anybody if I could. Just took them out and started knitting.
"Learning how to knit was a snap.It was learning how to stop that nearly destroyed me." Erma Bombeck
I've been flying and knitting on domestic flights since the week after 9/11. Doesn't matter to TSA folks whether I tell them my stuff is in the carry-on or not - I have NEVER had them even cock an eyebrow. I've never asked anyone whether it's okay to knit on a plane or not, and no one has ever challenged it - on US Air or anywhere else.
Just flew on US Air and didn't have a problem using #4 metal circular needles.
I fly a lot and have never had an issue with knitting on domestic flights. I don't think I would take needls on international flights. When I do fly I always carry a self-addressed, stamped envolope just in case TSA has a problem with the needles. This way I can send them home. I also carry extra needles in my checked baggage.