Have a read through some articles on bicycle fit:
http://www.cyclemetrics.com/Pages/Fi..._fit_links.htm

And an article on knee pain:
http://www.cptips.com/knee.htm


Also, try this ... stand upright with good posture. Relax, shake your legs a bit, walk on the spot for a moment or two, then stop in a naturally relaxed standing position. Now look down at your feet. What are your feet doing? Are they perfectly straight in front of you? Are the toes turned inward (pigeon-toed)? Or are your toes pointing outward.

If your toes are pointing outward, that is a natural position for you, and people have varying angles at which they are comfortable.

Ideally, the cleats on your shoes should be set up so that your feet are in their naturally comfortable position, however, if your natual stance is one where your feet really point outward (like in a wide V), you might want to set your cleats up so your feet are just a bit straighter than "natural" so that you don't hit your heel on the bicycle ... and see how that feels.