A friend wrote me a few days ago with the following question:
What’s the difference between walking in darkness and walking in light with sin [in] 1 John? Confession?
As I read through 1 John this morning it seems that the answer is “yes”, but only in part. In 1.1-3 the author reminds his readers that “we” are the ones who saw Jesus and we proclaimed him to you. I am not sure to whom “we” is a referent but the “we” of this epistle is surely the one who first proclaimed the gospel as well as the one (or ones) who knew Jesus (personally?). As regards identity I will leave that to Johannine scholars.
The message proclaimed (v. 4) is that God is light which means God has no darkness, at all. Therefore, if we are in fellowship with God (this whole passage echoes John 14-17) we must walk in light were the forgiveness of sins is found (vv. 6-7). So yes, one can “walk in the light” while still sinning. Anyone who thinks that sin is a thing of the past “deceives themselves” (v. 8).
Therefore, the author understands confession to be essential. When we confess he forgives us (v. 9). So the problem here is not “sin” but rather not acknowledging sin (v. 10). It seems that there may have been some who actually think they no longer sin, therefore when they did sin their response was denial rather than confession.
The author establishes that he says this so we “won’t sin” but if we do sin we have Jesus as an advocate with the Father because he died on our behalf (2.1-2). As a buffer against possible antinomianism the author reminds his audience that our “knowing” Jesus is evidenced only by keeping his commandments. In other words, someone who continues to sin, does not confess, yet says they know Jesus is a liar because one who knows Jesus attempts to live like him (vv. 3-6).
Now here is where I say this is about more than confession. The author fleshes it out with at least two primary examples: (1) You cannot hate your brother and be in the light (vv. 9-11) and (2) you cannot love the world and the things of the world (vv. 15-16, which likely refers to the world’s system, surely not to the unbelieving “world”). The reason he is calling this people out as people who do not confess and therefore as people who live in darkness is because (1) in a spirit of antichrist they have “gone out” from amongst the true believers and (vv. 18-19) and (2) they have denied Jesus is the Messiah (vv. 21-23).
This explains why in 1.1-3 the author speaks of his group as the ones who seemingly knew Jesus, testified to Jesus, touched Jesus, and so forth. These ones brought the gospel to the readers. The author is now reminding his readers that this sectarian group that has split off from them is in darkness, and they are antichrist, because they are denying Jesus is Messiah. Therefore, remaining in light, loving one another, and not loving the world is all dependent upon acknowledging Jesus as Messiah because it is only by acknowledging this that we can stay in the light and find forgiveness of sins when we confess. If Jesus was not Messiah confession means nothing because we do not have Jesus to mediate us into a relationship with the Father. If we are not in a relationship with the Father we are lost.
I think chapters 3-5 should be read in this context as well. While it is about sinning and confessing it is more about who has access to that forgiveness because they remain in the light by remaining in fellowship with those who confess Jesus as Messiah. I hope this very long answer is a sufficient one and if there are any Johannine scholars that would like to weigh in please do so.
the archives near Emmaus 
I think you are basically right. Light in John in truth. Darkness is falshood. To walk in the light is to walk (or live) in the truth. Jesus Christ is truth. So to walk in the light is to live in the truth of Jesus as the Messiah and Savior of the world.
Can we walk in the light and still sin? Not intentionally in an ongoing rebellious or selfish manner. So long as we acknowledge our need for Jesus and his salavation work in our lives, when we do sin we have an advocate before the God, Jesus Christ the Righteous One.
Really, one need a rudamentary grasp of the basis of gnosticism to get what is going on in 1,2,3 John and even his gospel – while gnosticism wasn’t fully developed and practiced in the open until well into the second and thrid centuries – there was plenty of the incipient forms of it developing in the mid to late first century. Even Paul warned Timothy about the thing falsely called knowledge (gnosis).