Hmm, this got me thinking: An interesting loop occurs when you want to announce that person X has been knighted (what is the verb for women, "damed"?), i.e. is now Sir X (SX). The thing is you can't say "SX has been knighted" because that is a tautology. But saying "X has been knighted" sounds wrong because, you know, he's no longer X.
Spent a good ten minutes Googling this one. It would seem no separate word exists ('damed' is not a word), though one site suggested the use of 'daymed' (it's a pun. not very funny :)
I believe technically both men and women are knighted. One becomes a Sir, and the other a Dame. If you think it sounds funny, I supposed "made a dame" might be another way of phrasing it.
If memory serves, historically the verb "create" was used for high appointments. For example, the monarch would take Bill Smith and create him William, Duke of Somewhere. He would then formally be addressed as Lord Somewhere.
I don't know whether the same phraseology would ever have made sense for a knight, though, and I may well be a bit off on the details.
You can always cheat by referring to him indirectly ("design chief has been knighted") or simply claim that you are addressing him informally. The Sir is formal, I do not believe you are required to use it in casual conversation?
Well, we could put this another way and say that his name has not changed, in the same way as you might address me as Mr. John Doe OR John Doe OR Mr. Doe. Mr, Mrs, Miss, are all (classically) forms of minor titles.
Anything published in the press ( news etc ) is considered formal. Not that related laws are enforced much, these days; even the BBC routinely gets it wrong.
I think that the loss of the honorific is still entirely polite if it's ommitted from the sentence that describes the person gaining their honourific. You're not diminishing them in any way, so it's not impolite.