A visitor to touringkayaks.com asked whether the Q700 kayak would be a suitable fit for him, given the fact that he has a bad knee. I hedged in my response, asking for more information. In general, though, paddling can be a great activity for those whose knees may limit their ability to participate in sports such as hiking, bicycling, running, etc:
“Once you are seated in the boat with your knees under the deck, it is not necessary to use your knees a great deal. But that also depends on the type of paddling you are doing and the conditions you paddle in. Edging a kayak and rolling both involve using the knees. Paddling in rough conditions is also likely to demand use of the knees to help stabilize the boat. On the other hand, paddling in flatwater places little demand on the knees.
My overall answer is that I think kayaking can be an excellent activity for those with knee problems. I have worked with handicapped paddlers including amputees and have seen them do very well paddling conventional kayaks without any modifications.
A recent discussion on paddling.net has more views on this subject: http://www.paddling.net/message/showThread.html?