I struggled with this question after my sister gave me a Camillus USAF survival knife (with leather handle). I had never owned a knife with a leather handle, and wondered how to treat it. After 10,000 opinions some from reps who talked about steel/preservative interaction, I settled on mink oil. I've heard that it can turn rancid both on the leather and in the can, but I've had no problem. I still don't trust it fully in it's interaction with the steels (time will tell, you guys in England and Australia will hear me scream if it rusts my Wave!).
Good Luck, Bill.