Endpoint.....You have dislocated your knees before right? That should tell you that you shouldn't do the hack with bad knees.
Directly from Mel Siff, "Facts and Fallicies of Fitness:"
"Hack Squat machines can impose excessive shearing forces on the knee and are a poor, insafe substitute for the free standing squat: if you use them, you should ensure that a partner helps you start with your knees extended and that you control the movement carefully at all times."
If you have knee problems, I would stay away from hacks and heavy leg extensions. The barbell squat, once proper form is taught and corrected will strengthen your knees.