With your knee you should definietly go with something as low impact as possible. Just talk to the people at the store and see what the suggest. An ellipitical machine, step machine or exercise bike might be better.
Get a bicycle.much more versatility since you can ride it outdoors in the spring and summer.For winter you can buy a "trainer" that you hook to the bike and make it as good as a spinning cycle they got at gyms.
for the trainer go to www.tacx.nl it's the cycleforce one that I recommend,got one myself.
As for bikes,well each to his/her own.Check with a nearby specialized store and they'll help you out I'm sure.
It's low impact and even though a good new bike costs a bit it'll last you for a long long time with proper maintenance.
I would suggest a cross trainer. Low impact, easy on the knee's, strengthens calves, thighs, etc. I use one at the gym. I will check the make and model if you would like.