Jokes apart, there is considerable research that has gone into Wootz steel produced in India, and its special properties (reported in the Nature story). My colleague, Prof. Ranganathan (in collaboration with archeometallurgy researcher Dr. Sharada Srinivasan) has written a short article as well as a book (a pre-publication version is available for free: text and figures).

Coming back to the story about the German researcher's suggestion (speculation?) that carbon nanotubes might have been present in Damascus steels, count me among the skeptics. The presence of nano-scale microstructures is a puzzle that was solved quite sometime ago: they are created when hot and cold steel is bashed repeatedly for producing swords. The nanoscale structure is also the reason for its ultra high strength. The presence of nanowires of carbon rich cementite is thus not a 'new' finding.

Finally, to my knowledge, carbon nanotubes have been made only under extremely special circumstances (which also explains why their mass production -- for use, for example, in steels for ship-building -- is still a dream). It's extremely unlikely that the 'ordinary' atmosphere under which Wootz was made would have yielded nanotubes.

Bottomline: Do we need carbon nanotubes to really explain why Damascus swords made with Wootz steel are so special? Use Occam's razor (or, for that matter, the Damascus swords themselves).