Update: ravel.org looks like a better solution for knitr in Org-mode. Thanks, Charles Berry.
The syntax of knitr/Sweave is not compatible with the Org-mode in Emacs. Ideally we should be able to write an R code chunk like this:
#+begin_src R chunk options... x = rnorm(10) plot(x) #+end_src
If we want to use knitr in the Org-mode, we have to cheat a little bit by putting the R code chunks in
#+end_LATEX, then convert the org document to tex, then rename to rnw, and finally process with knitr to get the real tex output.
#+begin_LATEX <<demo-chunk, echo=TRUE>>= x = rnorm(10) plot(x) @ #+end_LATEX
Prasad Chalasani experimented with the above idea and put up a repository OrgKnitr on GitHub so that you can use his script to quickly compile an org document to PDF. Thanks, Prasad!
Actually I do not know much about Org-mode. If you have other ideas about the Org-mode, I'd love to hear about them too.