i hate that when people say "i know how you did that... you..."

and sometimes they're right, mostly they're wrong. either way you say. no that's not how i do it! but they end up saying yeah it is! blah blah blah. they're so annoying!

what's a good way to answer that?

You can always just take the "grandma" approach and just smile, nod and then say "well that's nice!/ good for you!" in the sweetest tone possible and then go on to another trick.
Otherwise get in quick and as soon as they say I know how you did that, smack your hands against your head and say: "This Sucks, ever since the masked magician everyone knows that it is all done with smoke, mirrors and camera tricks!"

You can also say: "Cool! then show me...". almost everytime they say:"Oh, I can't but I know how you did it anyway..." and then you say: "of course you do"...

Pretend you didn't hear them. Most people either don't notice or don't pay attention to anyone else when your performing.

i concure

Just say "Then lets keep it our little secret"

he doesn't even say i know how you did that!

he just says "you know he does it by..."

and he's actually right sometimes. he seems to sneak behind me when i'm not looking.

Go into a long winded and ridiculous explenation of how you really did it. And when I say ridiculous, I mean, go to town with it. If there are other people around, make sure they can get a good laugh at his expense. Just go on and on about how it's really done, but make sure it's nothing close to the truth, and physically impossible. Tell him you friend the aardvark that lives in your pocket does the work for you, tell him absolutely anything, have fun with it.

sounds good

If youre preforming for like friends, i usualy say "wow. out of all the wrong explanations of this, youre's has to be the most stupid" its meant as a joke.

i would agree with the one above me and i would also say that if he tells he wont wake up ever again

My Step-Father, Mr. Knowitallneverwrong, used to be my greatest nemesis when I would use my family as guinea pigs. First of all, he's blind in one eye so he can only see half the illusion anyway.
During a "trial" performance of a card routine, (the last I ever showed with him around), He got his "I'm so cool" look on his face, crossed his arms, stuck his chest out so it was almost as far out as his belly and said, "That was easy, I know how you done it."
I simply replied, "OK i guess you don't need me then". I handed him the deck and went to my room to work on something else...Ah the good ole days of livin at home

About 2 years later, I was at a public performance, and who do I se sitting right in front? My Mother who is impressed by everything I do, My little brother (then age 7) who is unimpressed with anything magical since he learned his first trick, and My step-father, Mr. Knowitallneverwrong.

However, instead of trying to make himself look cool, I heard him a few times say, "Now how'd he do that?" He's never tried to tell me how i did it since.

I don't suggest this being the way to deal with an average heckler, but this was a family oriented case. And family is supposed to be supportive. From what I've been told, he actually tried to reconstruct the card trick that he "knew how i done it" and failed. Thanks Mom

You could always do a hit-and-run...

I like to say, "cool, me too" but I saw it almost as if I'm talking to a child. It usually makes it clear that they are probably wrong. Oh yea, and then I fix the trick so nobody says that to me again.

Tell them in a y tone "Thats nice Now..." Then in a mean tone "BUZZ OFF STOP AND RUINING MY TRICKS!" Ask about 9 people you know to sourround him and say "STOP RUINING THE TRICKS THEY HAVE!" Then in a sorta sweet tone "We would like to see them so please buzz..." then in a mean voice "OFF!"