The kick you use during the freestyle stroke is the flutter kick. It is a fast scissoring motion with the knees mostly straight and the toes pointed. We did kick drills in class today, and the teacher described the knee bend really well: "the kick comes from the hips, the knee bend is incidental as your leg snaps back." It can be easy to keep the hips immobile, bend the knee, and push back on the water with your lower leg. But this doesn't produce a lot of power.
Instead imagine starting from the hips, keeping the legs straight, and whipping your leg through the water. This way, the knee bend feels like an afterthought, a consequence of the necessary hip motion. One reason to limit the knee bend is that it hinders hydrodynamics; that protruding knee acts like a snow plow that pushes the water as you try to move forward. But you want to push back, not forward!
A drill to practice this is doing 2x25 yards of kicking with the knee completely immobile. This forces you to accentuate the hip motion and discover where the real power comes from. You wont go very fast and it will probably feel clumsy, but it is a good exercise. Then you follow it up with 2x25 yards of regular kicking, again focusing on the hip movement but allowing your knees to bend slightly at the end of the motion.
A warning about kick drills; if you've never done them before, they will be very challenging. So start small, doing only 25 yards at a time, and doing only as many as you can do without being totally wasted. They will get easier as your legs get stronger and your technique improves, so hang in there!