Question: In trying to set reasonable limits on a PC's usage of the polymorph chain of spells. Is it plausible to require that the PC have some form of interaction with the target creature? Or can a PC polymorph into a creature that the PC has only heard about? Or read about in a book? Or seen just a painting of? From a solid role-playing standpoint, it seems reasonable to require that a) the creature exists in the multi-verse that the DM is running, and B) the PC has some knowledge of the creature. What is the minimum "knowledge" that the PC must have in order to polymorph into such creature?

Answer: 
In my opinion, you should at least **have encountered the creature before** to polymorph into it. You might even have to examine a body. Reading about it in a book or rolling Knowledge should only let you recognize it.

1. It lets the DM prohibit creatures with abilities that are broken in the hands of PCs, or creatures which don't exist in his game world.
2. It adds realism. How can someone who's never seen an ettercap expect to replicate its form, let alone its poison glands?
3. If the player really wants a certain form, they can go and hunt down a creature of that type, and this can be the seed for an adventure.
4. It prevents the player from assuming the forms of high-powered, low-HD creatures that would normally be above their challenge rating. However, this is rarely an issue since creatures with low HD for their CR creatures tend to get their power from supernatural abilities that you don't get with *polymorph*.
I've taken to a risk v reward method for Polymorph. I make only one simple alteration. If you nat-1 on a Polymorph, you accidentally summon whatever you were trying to alter yourself or others into.

Nice and tidy, it deters anyone from doing anything too terrible or dangerous and is rare enough that occasional massive risk can result in great fortune. It retains the power of the spell, while preventing it from being abused.

A potential addition that I considered but didn't include was increasing the failure rate for monsters that the player hasn't encountered before or hasn't passed a knowledge test to know about. That could work, but the risk of accidentally making the battle unwinnable seems to be enough for my players.