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I've heard two very different stories about Khornate champions and their sense of Martial Honour, some people seem to think that all they care about is the bloodshed and not the manner in which it is conducted.
The other school of thought I've heard is that while they value bloodshed above all, they also value honor to some degree, they'd kick a fallen marine's weapon back to them, so when they won the duel, it would be a fair victory, just as an example?
Can anyone shed some more light on this for me?

As I remember this, it was more of a case of old fluff vs new directions. Khorne actually has many aspects of himself, its just that the writers decided to focus on the bloodlust.

Khorne rewards prevailing despite adversity.

Bloodshed is great, but bloodshed resulting from titanic effort? Magnificent.

Alternatively, it could be argued that Khornate "honor" is but a further means of provoking bloodshed. Your blood is also desirable to Khorne, so why not kick the enemy's weapon back at him? It will make it easy for him to let your blood, while you are letting his.

Khorne is also the god of Martial prowess and honour, so yes that is a facet he encompasses. To Khorne, the blood of a greater enemy is worth more than the blood of hundreds of weaklings, because there is more honour, skill and challenge in the killing.

So that could mean returning an unarmed opponents weapon to make the duel more close and impressive, or it could mean not bothering to waste time slaughtering 50 unarmed civilians (who are not challenge and who's blood is worth little) if there is a Space Marine Captain to fight around the next corner. Thats not to say Khorne doesnt want the civilians killed. Just maybe later, when theres more time

Some Khornate Champions spared their enemies because they fought with valour and honor. Khorne respects people with some guts, BUT, at the end of the day, he WILL have the bloodshed he seek, so he's not so lovable.

I don't think a Khornate would spare a foe, but certainly kick his weapon back if he was a worthy foe, or had been disarmed dishonorably.

At least with "recent" GW publications (the past 10 years or so), I see it merely as a matter of God =/= Follower. From the 4E Chaos Codex:

""Khorne is the Blood God, an angry and murderous God of Chaos whose bellows of insatiable rage echo throughout time and space. His great brass throne sits upon a mountain of skulls in the midst of a plain of splintered bones and lakes of blood, the remains of his followers slain in battle and those killed in his name. Khorne embodies mindless and absolute violence, destroying everyone and everything within reach, slaying both friend and foe alike.
The followers of Khorne are always ferocious warriors, for the Blood God abhors the trickery of magic and cowardly sorcerers. Men turn to Khorne for the power to conquer, to defeat their enemies in battle, to wreak bloody vengeance and to attain unaimaginable martial prowess. The most fanatical and dedicated to his followers, those trapped fully within his clawed grasp, know that he desires only wild slaughter. Khorne cares not from whence the blood flows, only that it does."

"Under Khorne's urgings, his endless tide of soldiers are whipped into a blood frenzy, and will fall upon each other in their desire to spill blood if no other foe can be found. For it is war - constant, mindless bloodletting and destruction - that is all Khorne cares for. He cares not who is victorious and who is slain, just that they fight until they can fight no more. All that Khorne exists for, all that his entire being is bent towards, is the flow of blood from fresh wounds and the taking of skulls."

The above is contrasted by the simple fact that a Khornate cultist may not necessarily embrace his deity's aspect entirely, or may even be completely unaware of certain facets of it. There is no single "How to be a good Khornate" rulebook, after all - only with time and more and more bloodshed, the individual cultists seems to become ever more trapped by his or her Chaos God's urgings, letting go of any last vestiges of honour they may still have had during their first years as a follower.

As has already been mentioned, earlier material, specifically the stuff from Warhammer Fantasy, has painted Khorne in a less single-minded way, though.

Martial honor is regulated by shame (if a champion is dishonorable, he feels ashamed). Shame is guilt, and guilt is self-hatred, and self-hatred is wrath turned inwards.

Essentially, martial honor is a very distant and diluted form of rage. Its understandable that some Khornite champions would value you it, but really its only a small portion of the Blood God's teachings. He would probably be fine with a dishonorable Champion if they were angry enough. It doesn't matter what you're angry at, so long as you're angry.