I have created a new instrument in Kontakt 4 and am wondering if the original wave files are still needed.
Is the nki file standalone?
No… therefore you are asked, whether you want to save the preset or the preset together with the used samples.
The Standalone version of the presets are ending in .nkm and are called "monolith files. It is the third/option (one the right side) when you are trying to save in Kontakt
AFAIK .nkm is a multi and .nki is a single instrument. Both can be saved as monolith.