1:24 The ones who had been sent were from the Pharisees.
1:25 They asked him,
"Why then do you baptize, if you are not the Christ, nor Elijah,
nor the Prophet?"
1:26 John answered them,
"I baptize in water, but among you stands one whom you don't know.
1:27 He is the one who comes after me,
who is preferred before me, whose sandal strap I'm not worthy to
loosen."
1:28 These things were done in Bethany beyond the Jordan, where John
was baptizing.
"That prophet" refers to Deut 18:15 "The LORD your God will raise up for you a prophet like me from among your own brothers. You must listen to him." That prophet turned out to be Jesus as Peter affirms in Acts 3:22.
Thus the priests and Levites were incorrect in their interpretation of the literal Elijah preceding the coming of Christ, and their idea that the prophet Moses speaks of was different than Christ. The Muslims are also clearly incorrect today in their position of Mohammed being the prophet spoken of by Moses.
vs 24-28 His response to their inquisition of why he baptized was basically - "this is nothing compared to what is coming." The synoptics clarify this saying of Christ, "He will baptize you with the Holy Spirit and with fire." Matt 3:11 John's baptism was one of repentence, but Christ's is one of regeneration. One is associated with water and the other with the Holy Spirit and fire. Therefore realize that when the Bible speaks of baptism it is not necessarily referring to water baptism.
vs 29-34 "The Lamb of God" refers to the sacrifices made under the Law of Moses whereby sins were covered by animal sacrifices. But these were only a symbolic precursor to the atoning sacrifice to be made by Christ on the cross who would substantively take away the sin of the world. Notice he speaks of the world and not simply Israel. Thus from the start the gospel was not simply about God's relationship with the Jews, but God's relationship with the whole world. I think "sin" is singular in order to expressed it as a whole category and thus incorporate all sins.
It is unclear to me exactly what John meant when he said "I knew him not", for John was his cousin and his mother Elizabeth had declared Jesus as Lord even while still in Mary's womb. (Luke 1:43) and John also in the womb had somehow sensed the presence of the Lord Jesus as well (Luke1:44). And furthermore in Matthew 3:14 John revealed that he knew him even before revealed by the signs. It could be that John meant that he did not recognize him as Christ in an official capacity based upon external observations, even though he knew him personally as Christ. The word for "know" here is not ginosko which is a relational knowledge, but oida which is knowledge gained by perception. And although even in the womb he perceived Christ, yet did not perceive him based on external signs. It was here at Christ's baptism that he would officially declare Jesus as Christ - the annointed one - based on the signs given by God and in a similar manner as the prophets had annointed the kings, so he would annoint this King with baptism.