It's found in conversations where someone is trying to explain something and they pepper the explanation with "...you know...". It seems to happen when their mouth gets ahead of their brain. They seem like they don't want to wait for their brain to catch up so they just insert a "you know" to get from one point to another.
It's a cousin to the ever popular "um" - that wonderful utterance when someone is trying to think of what to say next, and the person's brain just gives up. It's a wordless glitch.
"You know" on the other hand is a mindless assumption; the speaker assumes the listener is totally in sync with the speaker's explanation, and the speaker just says, "Blah, blah, blah, blah -- you know -- blah, blah, blah...".
Sometimes there is the hint of an inflected question. Always the speaker mindlessly assumes that the listener knows what they speaker is explaining.
My reaction? "No, I don't know." I'm thinking "Hey, speaker, it's YOUR job to explain, not ASSUME I know what you're talking about."
I love it when someone is going on and on about something, and they end their delivery with a "You know...?" -- and the listener just stands there and doesn't respond. Other times listeners will respond with the just as mindless "Uh huh..."
Ah, the fine art of conversation.