There seems to be conflicting information about recumbent exercise bikes and their effects on knees.
I've been told by both a sports medicine physician and a physical therapist that they are easier on knees. In fact, they put patients on recumbent exercisers to rehab knee injuries (well, certain types of knee injuries). They have a bank of them at the physical therapy clinic.
This link says the same:
http://www.articleavenue.com/article...hread-0-0.html
However I don't doubt that one could set the resistance too high, or that certain types of knee problems could be aggravated by them.