Hi DeezUU,
For one thing, you can concentrate heavily on the upper body strength training exercises on the alli Web site. Aim for two sessions per week.
If your knees bother you while exercising, one of the best things you can do is swim or aquatic exercise. I know you don't want to join a mega gym, what about a local WMCA? Water is so good for your joints because it doesn't put the same pressure on them as walking or jogging does, but it does provide you with a good amount of resistance to make your workouts challenging. You can do laps in the pool, take a water aerobics class, or try the water bouys to immobolize your lower body and work just with your upper body.
If you do cycle, go easy on the resistance and keep your rides to 30 minutes. If you've never done Yoga or Pilates, you can purchase an exercise video and workout whenever you want right at home. Walking should be OK for your knees, especially if you have a local track you can do laps at.
Be sure to stretch before and after your workouts.
Good Luck,
Paul