In my friends house he has K&T in his attic, one the HOT goes to a light and the Neutral goes to Switch. He wants to relocate the switch so it is going to need longer wiring going to it. Is it OK to run the K&T into a Jbox and run romex out to the switch in the new location? Also would it be OK to leave the Neutral as swtiched.

The HOT (LIVE) side of a circuit should always be the one switched, not the neutral!!! This is what protects you from accidental shocks.

Advice from one D-I-Yer to another: Contact a licenced, qualified electrician (preferably one with experience in K&T).

Most of that stuff is safe...until you start touching and manipulating the wires and the insulation starts crumbling.

What is K&T?

this is knob and tube http://www.oldhouseweb.net/stories/bitmaps/10327/knobtube.jpg