I have taught at the Boston Conservatory for over 10 years now, and I have been teaching Piano Literature during that entire time. I am glad to say that it is a well-liked course, and that over the years many students have gained from it. My aim has been in part to give the students a detailed idea of what piano repertoire exists (it's a four-semester series of classes, required for undergraduate pianists) and also to focus their attention on some important musical features of different composers and their works.
Over the years of introducing, say, Scarlatti Sonatas or the music of George Crumb, I have gotten pretty comfortable with what I know and how to share that knowledge with the students. But there is no question that I am more engaging and more interesting when I don't rest on my laurels, when I share something that I myself have learned recently. The truth is that the class was a good class 5 years ago (at least the students thought so back then), and it would be easiest simply to rehash the same material in my lectures now. After all, Schumann's "Kreisleriana" hasn't really changed since then. But when I spend time to learn more (and believe me there is ALWAYS more to learn about great music), I know I am a more effective and inspiring teacher. Lately I've been reading (on the subway ride to and from school) a book called "Twentieth Century Piano Music" by David Burge, which has given me new insights, and I just checked out Kenneth Drake's "The Sonatas of Beethoven," from the library as I prepare to explore this subject with the students for the 11th year in a row. I think the students can tell when I am eager and excited to share something with them - as opposed to rehearsing one of my well-worn old lectures from 2002.
I have noticed the very same thing in my applied teaching. When I am busy practicing for a concert, I might be more tired in a lesson than I would otherwise be (and perhaps even slightly annoyed that my practice time is being interrupted by giving a lesson!) but I am a much more energetic teacher, with important musical and technical ideas on my mind that I am ready and eager to share.
So the moral of the story: to be a good teacher, keep on learning. My own teachers have all been wonderful examples of this.