I think Jon at JKI put it best. Here's a quote from his blog.
"Hitachi makes a number of carbon steels. Here are the common ones found in knives.
SK Steels (sk5, sk4, sk3)- the least expensive of the carbon steels and the lowest carbon content (#5 has the least carbon, #3 the most). This steel has higher amounts of phosphorus and sulfur than the other steels i'm about to mention. This steel tends to be tough (due to the lower carbon content and thus lower hardness). It also tends to be more reactive.
Yellow Steel (yellow 3, yellow 2)- This steel is more pure (less phosphorus and sulfur than the SK Steels). It also has higher carbon content (#3 has less carbon than #2 in this case as well). This steel is commonly found in saws and wood working tools. It is also sometimes found in knives.
White Steel (White 3, white 2, white #1)- This steel is even more pure than yellow steel (which is relatively pure). Once again, the lower the number, the higher the carbon content, so white #1 has the most carbon and white #3 has the least. The higher carbon (and hardness) leads to white #1 having the best edge retention of the white steels and also the best ability to hold an acute angle. White #3 has the best toughness.
Blue Steel (Blue #2 and Blue #1... i'll talk about blue super later)- Blue steel is white steel with chromium and tungsten added to it. Blue #2 has the same amount of carbon as white #2 but has the added elements. Same for blue #1 and white #1. The added elements lead to better corrosion resistance and edge retention (as well as deeper hardening). This also comes at the cost of being more difficult to sharpen and not taking quite as keen of an edge. Blue steel also tends to be more brittle (ever so slight).
Blue Super- Blue super is blue #1 with even more carbon, chromium, and tungsten added to it. Its the best of the hitachi carbon steels with regard to edge retention and ability to hold an acute angle (due to the higher carbon/hardness and added elements). This comes at the cost of being more difficult to sharpen, not getting quite as sharp, and being the most brittle of the bunch.
So, in conclusion, the white steels take the best edge (#1 holding the most acute angle and #3 being the toughest), while the blue steels hold the best edge (Blue super being the best at this while blue #2 and #1 have better toughness)."
Source: http://blog.japaneseknifeimports.com/20 ... arbon.html