When out in the woods, or stopping at a gas station, is there a legal limit for the length of a sheathed knife worn in the open on a belt?.

Does a folding blade (first choice) in a sheath make any difference?

It seems that 3" was some kind of maximum somewhere.

It's whatever length the nice policeman decides is a "weapon".

Some jusrisdictions have maximum lengths (like Milwaukee), but otherwise it's a discresionary call on the part of the officer.

Heading out to the woods with a 7" skinner on your belt?  Not a weapon.  Carrying the same in a boot while you're in a nightclub? Yeah, you'll get popped for CCW. YMMV, but pocket knives are generally not considered weapons, per se.

Just hope you don't get hassled by a Nut Case Cop™.

Some cities and counties have knife ordinances.  The legal FAQ at the top of the HTF has a section on this, towards the bottom of the FAQ.