Suki is spot on. Simple answer: it sounds better. It does sound more formal to me - like Caroline, I would never say that! You can read a nice, long, detailed explanation here: http://bdl.oqlf.gouv.qc.ca/bdl/gabarit_bdl.asp?id=3107

« On » is derived from the latin « homo », which means human being (in general), and by extension : anybody. « Homo » is a noun, and was thus preceded by an article. The Bible provides an example : « L'homme ne vit pas seulement de pain. » « Men don't live solely on bread. » (free translation) Later, « homo » evolved into « on ». It became a pronoun, but an old trace of its nature as a noun remained. This is why you come across « l'on », mostly in written texts. « L'on » means « L'homme », i.e. anybody.

"Ce qu'on sait" is what normal people say. ""Ce que l'on sait" though correct, sound pompous to me.

This question came up yesterday: http://www.italki.com/question/288003 It's apparently a relic of an older form of French which is sometimes used to make the sentence sound better.