Currently it isn't known exactly who or what the Beast is. However it is implied that the Beast is a collection of insects that are indigenous to the planet. The Beast is able to control the many indigenous insects including sandworms and mosquito looking things. The insects that make up the Beast commonly take up a human host, the first and most well known is Zazie the Beast, although since Zazie's death the Beast has taken another host, a young girl. This means presumably that the Beast is immortal until it runs out of host bodies, which might be never. The most obvious reason why the Beast works for knives is because Knives wishes to wipe out Humanity, and the Beast wants it's planet back, which the humans have taken over.
Zazie was used primarily for spying on Vash and gang with the very small insects that can be seen flying around every now and then. However Zazie was also part of the Midvalley and Hoppered fight, when it was his job to kidnap Meryl as bait. Zazie also explained to Meryl that Vash and Knives weren't human. Not much later Zazie was killed by Hoppered for unknown reasons. However the new form of the Beast reveled herself soon after during the gun shootout, she was even shot by Wolfwood in the leg, and had to disquise herself so that Vash and friends wouldn't see her when she was at the hospital getting her leg fixed.