Both a step drill bit and a knockout punch seem to be very similar, in that they both make holes in a metal box.
The step drill seems to have an advantage, since it can make several size holes using a single bit.
What are the major differences between the two?
A knockout punch is typically capable of going through thicker metal - at the very least, it will do it faster. A quick search easily finds knock-out punches that can do 10 gauge steel, where most step bits don't seem like they'd do well beyond 16 gauge (though I can't find anything that really says the limit).
For thin metal though, the step drill bit is probably faster, if for no other reason than the setup/tear-down time of the punch (eg, after you punch the hole, you still have to unscrew the punch).
Knockout punch:
Step drill:
Rule of thumb on the step drill bit is it should be used on metal half as thickness of each step. In the pics listed, the long thin would be used for thicker metals because each step is thicker. The fat wide bits are for thinner sheet metal. Keep in mind, the cutting edge is the thickness of the step.
It will go through metal that is thicker, but if you are looking for a clean round hole, the above will ensure it.
Knockout punches are expensive when you get into larger sizes and they require you have a large hole for the main bolt. For a 3/4" hole you have to drill a 1/2" hole, so you are back at either trying to 'step' drill using standard twist drill bits, or using the step drill bit.
