Does this mean that God did not know for sure what Abraham would do until He saw the raised knife? Does it also mean that God did not know whether or not Abraham feared Him? You are presented with a problem because God knows all the present completely and totally. If God knows all present things exhaustively, then did God not know the state of Abraham's heart regarding Abraham's reverent fear for God? How could He not? 1 Chronicles 28:9 says, "..for the Lord searches all hearts, and understands every intent of the thoughts.." Since God knows even the intent of the heart, then He knew what the intent of Abraham's heart was during the three-day journey to the place of sacrifice as well as whether or not Abraham feared Him. Again, He would have known that Abraham feared Him, and the test was unnecessary to establish this fact.
Then what does it mean?
Since we can see that it is not consistent with scripture and logic to say that God did not know what was in Abraham's heart and that God did not know what Abraham would do, we can conclude that God was speaking to Abraham in terms that Abraham was familiar with. This is not at all foreign to scripture. In Genesis 3:9, after Adam's sin, God calls to Adam and asks, "Where are you?" Are we to say that God did not know where Adam was in the garden? Of course not. God makes statements often designed to reveal to us a truth that needs to be presented. In fact, God often asks questions He already knows the answer to. In Abraham's case, God was simply relating to Abraham in terms consistent with what Abraham would understand, particularly after the actual event with Isaac on the altar and was for his benefit.