  [Abridged] We use new HST and archived images to clarify the nature of the
knots in the Helix Nebula. We employ published far infrared spectrophotometry
and existing 2.12 micron images to establish that the population distribution
of the lowest ro-vibrational states of H2 is close to the distribution of a gas
in LTE at 988 +- 119 K. We derive a total flux from the nebula in H2 lines and
compare this with the power available from the central star for producing this
radiation. We establish that neither soft X-rays nor FUV radiation has enough
energy to power the H2 radiation, only the stellar EUV radiation shortward of
912 Angstrom does. Advection of material from the cold regions of the knots
produces an extensive zone where both atomic and molecular hydrogen are found,
allowing the H2 to directly be heated by Lyman continuum radiation, thus
providing a mechanism that can explain the excitation temperature and surface
brightness of the cusps and tails. New images of the knot 378-801 reveal that
the 2.12 micron cusp and tail lie immediately inside the ionized atomic gas
zone. This firmly establishes that the "tail" structure is an ionization
bounded radiation shadow behind the optically thick core of the knot. A unique
new image in the HeII 4686 Angstrom line fails to show any emission from knots
that might have been found in the He++ core of the nebula. We also re-examined
high signal-to-noise ratio ground-based telescope images of this same inner
region and found no evidence of structures that could be related to knots.
