make sure bike fits:

saddle height--mount bike, put cranks at 6/12 o'clock, heel of foot should just barely be able to scrape lower pedal-- start there, make small changes after that

toe clips or clipless----make sure the toe clips are deep enough or cleats are far back enough on your shoe, pedaling with too much toe is a sure recipe for knee pain, just add miles and a decent gear and its enough stress to cause major knee problems---pedal spindle should be at or behind the ball of your foot

fit issues under heavy loads(big gears) will very quickly appear as pain, you shouldnt have any pain other than some muscle soreness, even on a track bike without a brake

another thing you can do besides gearing down is stand up more, it decreases the angle on your knee, this helps take some of the stress off under heavy loads......I do it stopping and starting all the time, much easier on the knees than sitting and mashing

can you do permanent damage to your knees? yup, you can, its painful as hell, but people do it

I put myself off the bike for a week once with knee pain, source was toe clips that werent deep enough, took 300 miles in 4 days and boom, my knee started swelling bigtime then came the pain. 1/2" difference in one simple adjustment was all it was.