Squats often get a bad rap for hurting people's knees, and there's a lot of argument about how you should do them.
First things first: There's no "better" way to do a Squat. Depth of Squat (1/4, 1/2, Full) and what type (Front, Back, Trap Bar, Kettle Bell, Sumo etc) are all dependent on the person and what their goals are. Even knees past your toes is ok - to a certain extent.
See these great blogs about Squats:
Secondly, Squats are NOT causing your KNEE PAIN, or making your knee pain worse. How you PERFORM them (Don't let your knees collapse inwards), how many REPS and SETS you perform, how OFTEN you perform them, how much LOAD you lift whilst performing them and how RAPIDLY you progress the LOAD are the PROBLEMS.
In my video, I've got a band around my knees to get more work out of my Gluteus Medius. It also acts as feedback to keep my knees from collapsing in at the depth of the Squat.
Take home message: There is no such thing as a BAD exercise. Squats are great for knee/hip health and athletic performance, so if you're not doing them, you probably should. Of course, consult with an exercise professional before starting them.
For more information on this topic, feel free to contact me directly here or via www.mickhughes.physio