Thanks for all of your help.

I have talked to a local shop and he said defiantly don't ride a fixed gear bike it will make my knee worse.

I'm really just wanting to strengthen my legs and hoping that will help my knee so I can skate/surf again with less pain.

Also the guy from the shop recommended a 52 or 54 inch bike for a guy my size (5'8).

They don't have anything at that store for less then $700. I was hoping to spend in the $300-$500 range but I don't want something crappy.

Any recommendations? Maybe I should just look for a used one??

Thanks again.