As a carpenter by trade, a carpenter pencil has been in my tool belt for as long as I can remember. Those funny looking rectangular pencils catch the attention of some who see them for the first time and wonder why they are designed the way they are. From my experience, here is what I can share about the design and use of carpenter pencils.
The shape of the carpenter pencil is unlike your typical round wood pencil—the dimensions are ¼ inch x ½ inch x 7 inches. It must be long enough and strong enough to withstand the construction environment and the pressure used when marking. The rectangular or elliptical cross-section allows easier grip than standard pencils and prevents the pencil from rolling on slanted surfaces such as roofs.
In addition, a carpenter pencil can be used as a gauge. For example, if you were building a deck, your deck boards could be spaced ¼ inch by using the carpenter pencil. Personally, I like to install wood deck boards tight together, which gives a nice gap over time when the wood shrinks, but when using PVC decking, I would gap the decking ¼ inch.
Using a well-sharpened carpenter pencil to mark lumber cannot be matched. The rectangular graphite lead draws better on wood, stays sharper longer, and is less prone to breakage. A carpenter pencil is sharpened by whittling the end with a utility knife. Some carpenters sharpen both ends at the beginning of the day.
What you are looking to scribe will determine the method used to sharpen the carpenter pencil. With standard sharpening, you put an edge on the rectangular long end of the lead (like sharpening an ax). This will give you a 1/8th inch scribe. Offset sharpening would give you a 3/8th inch scribe. These tend to help when not using a scribe block. In project point sharpening, a belt sander would take the wood off one flat side of the pencil to scribe in tight places to the exact plane. With blunt sharpening, the full rectangular lead is exposed with the flat blunt end and no edge. This type of sharpening is used when marking on rough surfaces, such as concrete, stone, or brick, as it can make clear heavy marks with less wear on the lead.
You will also find carpenter pencils with round lead. Round lead tends to hold a point better than rectangular lead and some carpenters prefer using them when doing trim work. Personally, I prefer using standard round pencils when doing trim work. They seem to make more accurate marks when doing miters and sit much better behind my ear.