Recombinant DNA Technology
Knockout mice are created by

transfecting embryonic stem cells with an altered gene sequence
mutagenizing a mouse and selecting for mutant offspring
infecting the mouse with a retrovirus
creating a chimera by fusing cells from two different cell lines

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Recombinant DNA Technology
Some genetic diseases cannot be diagnosed by changes in restriction sites. Some of these can be detected by allele-specific oligonucleotide probes. These are

mutagenized copies of a gene
short sequences that will hybridize only to a specific base sequence
PCR-amplified variable numbers of tandem repeats (VNTRs)
copies of the gene with an altered sequence so that a restriction site is inserted

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