A fellow student and I recently discussed the placement of menuki as part of a sword's koshirae. The question at hand was whether menuki were actually placed to align with the palm of the hands on the tsuka. None of the iaito in our dojo had the menuki placed thus, but that constituted only anecdotal evidence. Ross' book 'In Search of Mishima's Sword' claims that real swordsman placed the menuki to support grip, but he doesn't cite a source, making it hard to establish the veracity of his claim. So I went looking elsewhere, and came across this reference, which states that:
"From a pure functionalist point of view, menuki was basically born out of rather pragmatic demand to serve primarily as “mekugi osae” or the cover (or lid) over mekugi pin. Examinations of old Kara-tachi and Kazari-ken koshirae made in Nara through early Heian periods, such as the ones in Shosoin Museum and Tokyo National Museum, tend to confirm this functional origin of menuki among the earliest styles koshirae. (See Ogasawara, 1994 for photos.)
However, soon its secondary function to serve as a pair of ornaments began to be emphasized equally (Suzuki, 1995). Additionally, many other “latent functions (i.e., not originally intended or obvious but still important eu-functions)” were discovered (e.g., tactile indicators to tell the correct orientation of the edge or correct “tenouchi,” palm swells, status/rank symbols, religious charm, etc.). Then over the course of the evolution of Nihon-to koshirae, those secondary and latent functions of menuki seem to have taken over its “manifest function (i.e., originally intended and well recognized purpose)" completely."