First of all, the argument doesn't exist between the KJV and the NKJV, but between the NIV and all the other translations. The NIV IS a translation, and not a 'paraphrase', although biblical scholars(including Daniel Wallace) argue that ANY translation is a paraphrase, as idioms and meanings have to 'make sense' in the vernacular they are written in. Daniel Wallace says,
At bottom, the best translation is one that is faithful to the meaning
of the original text. That does not always, nor even usually, mean a
literal translation(Taken from here)
One important fact that stands out about the NIV, is that
The NIV was one of the first English translations of the modern era to
consciously depart from the King James Bible tradition. (Daniel Wallace-taken from here)
The KJV was translated from the Textus Receptus, compiled by Erasmus in 1516 from Greek texts which were in existence during that time. Robert Estienne, a printer, printed his 3rd revision in 1551, and that became the basis for the New Testament. Since the Greek Text was seen as the means by which the original meanings were derived, the Septuagint was primarily used, although the Vulgate and other Hebrew sources were used.
The NIV sought to remain true to the text, and yet use the sources not available to the KJV translators.
As to the disparity between the KJV and the NIV, the following argument was made:
The most literal reading of the Hebrew gives us "and knowledge shall
be increased" which means exactly the same thing as "to increase
knowledge." Cranston has made this error several times before, usually
in connection with the so-called "Granville Sharp rule" in the NT. The
word "and" is a conjunction. It can serve as a connective or as an
appositive. In this case it is a connective, connecting cause, travel,
with effect, increase of knowledge. Both mean the same thing. I have
often stated that the problem most people have understanding the bible
is not that they don't understand Hebrew and Greek but that they don't
This argument was made on "Baptist Board"(taken from here). I will leave others more skilled in deciphering the language, but it appears that a phrase which from Hebrew can be translated more than 1 way, yet mean the same thing, was rendered into English and it's meaning changed. While it is true that as people travel, the interchange of knowledge is more, therefore knowledge is increased, the normal reading of the passage would indicate "travel is increased, and knowledge is increased", which are 2 separate statements.
There are a number of scriptures in which the meaning is 'obscured' by the translation, hence it is necessary to seek the original intent before drawing conclusions.