There are a couple of ways to deal with PC knowledge.
One, as already has been mentioned, is to declare that characters know what players know but as general myth and hearsay. This is easy to implement and does not require players to roleplay detrimental actions. This allows players to roleplay being "professional adventurers" who are experts at what they do.
If you play a combat and dungeon oriented game style or if the players are supposed to be heroically competent (including their knowledge and expertise), then this works well and will keep the action going and mood consistent.
Another is to say to the players from the beginning, "I want everybody to roleplay only knowledge that is appropriate for their character." then it is up to them to say what from their background, knowledges, or class abilities provides them with metagame knowledge. I.e., "my background includes having fought in the war against the conjurer's fiend army." or "I am a ranger with favored enemy X" or "I have an applicable knowledge skill," or "we just fought these things a month ago, remember?" or "I'm a drow, we used to have bugbears as slaves, of course I know what they look like, the filthy beasts" or "I am a bard."
The advantage to this is there is more roleplay immersion, more ingame character talk, and more thought about characters.
If you go with the die rolling knowledge checks then you will still have the situation of PCs who know information who do not have the skill or fail the roll. Also you then have them using the skills to provide information about monsters they don't know about as PCs ("what weapons and attacks are good against devils versus demons, I have planar knowledge, but not the MM). or "Is that an aberration or a demon? I have knowledge planar."
The main problems with not allowing PCs to use knowledge about monsters is when PCs confront Trolls, Rust Monsters, and Rakshasa, for the first time.
I would say it is probably a good idea to either allow the characters to know in character or to set up a situation where they are informed about these "classic" niche tactic D&D creatures before they meet them. "We want your aid in overthrowing the corrupt rajah, we believe he is in fact a rakshasa! What? You have never heard of the rakshasa? They are masters of illusion and magic, but it is said they have a vulnerability to divinely blessed crossbow bolts. . ."
Otherwise you have out of character actions, or unhappy players getting trashed while holding one hand behind their backs.
There is little more mood breaking than a player acting out of character and a DM saying "You don't know that and you can't do that"
It can be fun to roleplay finding out about a creature, there is usually some campaign or world specific informaiton that makes the creature new to you in some way or that brings it more fully to life. It can also be fun to roleplay how a developed consistent personality for a character interacts with a new creature "I Hit it with my GreatAxe! RAAARGH!"
Of course, As a DM I would always recommend describing creatures physically instead of by name. It gets the PCs into the feel of the fight and game more viscerally and can lead to some amusing confusion or even to characters renaming monsters. I've had soloing PCs get terminology wrong (bugbears vs. owlbears) or typing "A big batwinged fear radiating [pit] fiend eh?, I think I recognize that as the most badass demon from the book, lets see, they are chaotic and from the abyss, I'll have to remember that in my flattery."
I also do not let characters use the MM, srd or other DM sourcebooks in a game unless they have an in character reason to do so (I've had past characters find the Van Richten's guides, for instance).
