Like Monsta said, they are only hard on the knees the first few times-your joints are getting used to the stress and actually getting stronger! Just make sure you stick your butt out throughout the lift. That, and if you do more than you can handle-your legs start bending inwards as you lift-then you're doing more than you can handle. Have you tried hacksquats? They're pretty interesting, and somewhat close to a Oly squat.
That, and lower the reps, and increase the weights to gain more strength. Most of us keep it around 5 sets, each of 5 reps.
Deadlifts and squats rule!!!!!