"KB" is an acronym for "Knowledge Base." This is just a shorthand for the list of information the CM creates at the start of a Chill scenario and campaign, as explained on pg. 11.
As detailed on pg. 11 (Chill), Information Skills (indicated by an [I] on the Narrow Skills List - Comp., pg. 33-34]) can be used to gain Knowledge or Research a situation, topic, et.al. Due to a typo, the [I] indicator was listed on the right-hand side of the column for this skill [see sidebar]; Investigationis an Information Skill. Investigation can be used to garner Knowledge or conduct Research, as described on pg. 11.
As explained on pg. 23, Investigation includes techniques such as searching the Web, trailing individuals, staking-out significant locations, interviewing witnesses, and more. Entire scenarios can be made of Investigations involving the use and testing of many skills and abilities, copious character interaction and exchanges, and other roleplaying opportunities. Just imagine how short a novel Dracula would be if Harker had simply "rolled" Investigation! (Which might not have been such a bad thing, come to think of it...) But in addition to being a quick resolution system, the skill's description also explains how to handle Investigations systematically. These rules explain how to govern the [I]nformation Skills system on p. 11 when conducting an Investigation.
There will also be situations in which no one [I]nformation skill seems most appropriate, even though the PC wants to undergo the procedure(s) detailed on p. 11. Perhaps the scope of the Research spans many skills sets or topics, or the CM thinks the situation too Broad or generalized for one skill to cover it. In these cases, the PC can default to Investigation, if he possesses it; otherwise, another approach will have to be decided upon; or the character can attempt the procedure Unskilled([LCK+PCN+STA]/20).
Investigation cannot be used in place of Legend/Lore - Chill, p. 23. CMs may allow Unskilled (default) use of Investigation, but not for Deduction (following). Investigation is a Broad Skill (Comp., p. 31).
Investigation as Deduction
Before play begins, the CM should consider creating a list of Deduction clues for various situations - Menaces, Menaces' accomplices and Minions, Agents, scenes - anything the CM deems apropos; adding a list of Deductions by Skill to the KB for C Results; or simply working-out some deductions a trained Investigator might make for inclusion in the mission(s). When the PCs encounter these situations, the CM secretly rolls Deduction against the characters' Investigation.
Deduction is the envoy's ability to notice clues, arrange them in a logical order, and develop a conclusion. Sometimes, the conclusion will be completely wrong, but the envoy will not know that until he acts on his assumptions or confides in others. Deductions are the kind of "Aha!" moments made popular by detectives like Sherlock Holmes and Adrian Monk. H and C results could potentially result in "Here's what happened..." revelations which threaten to reveal too much too soon or easily, so feel free to ignore them, if you wish.
Deductions are similar to a C Result in any [I]nformation Skill, except they include a "conclusion" - an "it follows" insight - such as, "His milk is bad, so [it stands to follow] his groceries couldn't have been delivered yesterday!" Of course, the CM usually states them in Jeopardy-form: "How could his milk already be bad if his groceries were delivered just yesterday?"
Deductions are usually keyed to encounters, but may be part of the KB (as Cresults by skill), and more. CMs may allow PCs to spend Vested CIP in Investigation to "force" a Deduction (similar to the Reflective Edge, p. 121), and more. Deduction is the envoy's ability to notice clues, arrange them in a logical order, and develop a conclusion. Sometimes, the conclusion will be completely wrong, but the envoy will not know that until he acts on his assumptions or confides in others.
This is a loose, and very optional, extension of the Investigation skill meant to facilitate "detective" characters like the aforementioned, and make things a little more fun. Deduction checks can also provide a simple means of forwarding a stalled Investigation or scene, adding some mystery genre elements into the game, and possibly a little random insight. They can be utilitarian, but they can also be just plain fun - a little randomness off of which to play. Feel free to ignore the concept, but if PCs with Investigation insist, consider tailoring the concept to your campaign.
Unskilled Investigation cannot be used for Deduction; a character must have Investigation to try to Deduce something. This roll may replace or enhance the PCN attribute, but only for PCs with the Investigation skill - adept Investigators are more perceptive than the average layman and those with the skill should be privy to more information than those without it.