I just saw that Kylie Minogue has been awarded the OBE. Obviously she does not fit the image of “Knights of Old”.
When did the idea of a knighthood switch from being a military honor to a general honor? Was there one individual who was considered the turning point or was it a more gradual process?
Just a FYI but being awarded an OBE doesn’t make Kylie a knight (or dame, which is the female equivalent).
To start with, you should learn about the British honors system and why an OBE is not a knighthood:
There is nothing you can name
That is anything like a Dame.
Well, in case nobody’s mentioned it yet, an OBE is not a knighthood… 
But to answer the real question, knighthood started to lose its military meaning when people started opting out of the system of military duty. It was possible to evade your feudal duties by paying a tax called *scutage * instead; and the rise of the longbow as a military weapon made knights vulnerable. Since Roman times the standard piece of fighting kit had been the chain-mail coat, but the longbow could penetrate chain-mail (I mean, its arrows could). No aristocrat wanted to be killed by a lower-class archer. At the Battle of Crecy in 1346 the French knights were slaughtered by the English bowmen. They lost over 5000 men; the English lost a few hundred. Before long the knights were staying at home and the fighting was left to professional armies.
Tim Brooke-Taylor: “I’d like to be an Earl… with an OBE!”
Bill Oddie: “You’d be an earlobe!”
…which were paid for with the aforementioned scutage (“shield tax”).
Since the knights no longer had to worry about martial training, they were free to concentrate on governing their land and making lots of money for the Crown to tax - meaning more and more money to pay for a professional army.
Too late to ETA, but:
Once the focus of the knight shifted from military duty to commerce, the most successful knights were the ones making the most money. Thus, wealthy merchants, bankers, and landowners were natural choices for the “new” knighthood.
It was more several separate processes, all of them gradual.
The first point to grasp - after realising that an OBE isn’t a knighthood 
- is that knighthoods were never primarily a military honour at all. Rather it was a form of military service, usually connected to the ownership of land. Thus, although it was prestigious and might be given as a reward, it wasn’t an ‘honour’ in any modern sense. That form of knighthood then declines over a long period. As early as the thirteenth century knight service was being commuted into money payments and any real military purpose had long since vanished by the time knight-service was abolished in England in the seventeenth century.
However, there was the parallel development of the idea that knighthood could be given as a honour. The classic example of this would be some (but not all) of the orders of chivalry, such as the Garter. There was also the idea that someone could be knighted as a spontaneous mark of distinction, as on a battlefield or for delivering important news. But these remained the exceptions.
By the post-medieval period, say from the sixteenth century onwards, most knights were being knighted as civilians holding civilian offices. But this is not quite the modern concept of an honour either. This was more a title given to the holders of certain types of court and government offices. Some British public officials, such as high court judges, still get knighted in this way. There was no nonsense about senior civil servants having to ‘earn’ their titles.
It was really only in the twentieth century that the idea developed that the primary purpose of the knighthoods etc. was to reward notable achievements. And, to come full circle, one consequence of that was the creation of lesser honours, such as the OBE. Once it ceased to be mainly about giving certain senior public officials a suitable title, the system could become more egalitarian (in so far as such things can be).
The first part of your answer was pretty much correct, but I’ll quibble with this just a bit. Increasingly heavily armored calvary remained the norm until well into the 16th century. It was largely the dominance of the French gendarmes on the early battlefields of the the Italian Wars of the late 15th and early 16th centuries that inspired Gonzalo de Cordoba to invent the “pike and shot” formation as a counter. It passed its heyday thereafter, but armored shock calvary generally remained useful ( under certain tactical conditions and as part of a combined arms force ) through the Napoleonic wars.
The disaster at Crecy was certainly due in part to the novelty of the massed longbows, but it was more down to the foolishness of launching a frontal calvary assault against a prepared defensive position. Philip VI actually knew better - he had avoided attacking Edward III under similar circumstances before. But in the eyes of a chivalry-obsessed public opinion those “stalemates” had been humiliations, so he let himself be talked into this engagement, with entirely predictable results.
No, the decline of the knight as a social class of combatant was down much more to evolving social conditions than it was military technology and occurred well before the eclipse of heavy calvary as a combat arm. Insomuch as it was tied to changing battlefields, it was more the need for permanent standing armies as opposed to seasonal combatants that did the institution in.
Some of the things that changed knighthood may be:
The rise of the merchant class. In the early medieval days one’s ability with a sword was more important for social class than one’s skill at money-changing. Once merchants began exercising power, they demanded, and received, honors such as knighthood. As non-fighting men they helped dilute the aggressiveness of the knight as a class.
This was concurrent with another change. Early Knighthood was just a job rather than a social standing. To be a knight one just had to show up with a horse and a weapon. To say that someone was a knight was simply saying that he was a mounted soldier. As the middle ages wore on, knighthood started to become as much a social position as a career. So when the aforementioned merchants began to crave upward mobility, knighthood was the available honor to be granted.
There are other factors, but I’ll have to mention them for later, once I’ve got it worked out in my head.
To be fair, posession of a horse, armour, and the time to become proficient in their use generally required one to have quite a bit of wealth by the standards of the time, and that in turn usually meant a decent landholding with peasants/serfs to work it for you. So knights were usually a fair way up the social ladder.
And at least in France, there still were knights on the field by this time. The king Francis I was famously knighted on the battlefield in 1515 by the equally famous knight (and general) Bayard.
Actually, at both Crecy and Agincourt, the French commanders knew better. But in both cases, the complete lack of discipline of the knights led to their massacre. They would ignore the plans (for instance knights sent to flank the English just turned back when they heard the noise of the charge, that hadn’t been planned nor ordered either anyway, so that they wouldn’t miss out), and even direct orders not to charge were ignored. Or more exactly, were obeyed by some (at least until they changed their mind on their own accord at any random moment) and not by others, leading to even more confusion than if a frontal and massed attack had actually been ordered and conducted. At Crecy (If I’m not mistaken), knights even charged their own lines, on the basis of a rumour that the Genoese were betraying.
As for the meaning of knighthood, as already mentioned, it always evolved from the high middle ages “milites”, basically anybody able to equip himself with a horse, to the followers of a nobleman (landed or not, but not themselves noble), to the classical 13th century knight to eventually a purely honorific distinction.
Many, probably most of the gendarmes were actually of the same social class as the earlier feudal knights. But they were part of standing regiments serving for wages, rather than seasonal soldiers called up based on feudal obligation. In addition formal chivalric orders of knights continued to exist down to today, but again more as a badge of social status. So yes, there were knights on French battlefields in the 16th century, but they weren’t knights, if you catch my meaning :p.
Perhaps. But in the case of Crecy at least, Jonathan Sumption has argued otherwise:
Longer reflection persuaded most Frenchmen that it was not the crossbowmen but the French heavy calvary which was at fault for attacking the English lines in impetuous disorder…But his view, although common, was almost as absurd as the one that laid the whole blame on the Genoese. The French battle lines had been carefully drawn, and although the Count of Alencon’s battalion probably charged too early, there is no reason to suppose that their charge was any more disorderly than a massed calvary charge necessarily is, or that a charge at any other time would have succeeded better. To rally and reform as often as the French did at Crecy is no mean feat of horsemanship and discipline. There were two main reasons for the defeat. One was that the English had the incomparable advantage of fighting on the defensive…The second reason for his defeat was the technical superiority of the longbow over the crossbow, which was never more convincingly demonstrated.
From The Hundred Years War I: Trial by Battle ( 1991, University of Pennsylvania Press ).
That they did, the Count of Alencon mentioned above. But at Crecy at least it seems to have been more an issue of the poor decision to attack at all under very unfavorable circumstances.
Could cause a bit of a stir if the law was revised and all these theatrical,sporting and business knights were told that they were now obliged to ship out to Iraq and Afghan and do a bit of dragon slaying.
“Sir Paul McCartney, Sir Reginald Dwight, here are your rifles. You ship out tomorrow.” 
Not necessarily. After all, there were many peasants with horses and a sword could be acquired other than by purchase (outright stolen or picked up from the scene of a battle). Armor was expensive, yes, but not as much in the early medieval period and wasn’t absolutely necessary to be a knight in that period. The increasing expense of good military gear as the middle ages progressed was yet another factor in the evolution of the knight into a social position. Like you say, it took money to get the necessary gear which kept the peons out of mounted ranks. But it didn’t just start out that way from the beginning.