Knees...

redeye i'm going to borrow a set of my eggbeaters from one of my mtbs and fit them to this bike, i'm sure this will help, also, as i'll be able to apply an even stroke through the full circle. and proper cycling shoes will be better than what i'm using at the moment too.

next step: move saddle back. i'll try it tomorrow!

I just thought I would mention float as no one has brought that up, I have heard from a few sources than knee pain can often be the result of too little float in your pedal/cleat - I am not sure what the float is on the eggbeaters but a little more float cannot do any harm and may help your knees, I use Bebop deluxe pedals which have a good 10° each way (there own description is: "20 degrees of biomechanically correct float") - and I have never had knee pain and ride a MTB with a 48/11 ratio (on the road) - just an idea, might help.

Read more here: http://www.australiancyclist.com.au/article.aspx?aeid=2825

MEDIAL
*Not uncommon especially among cyclists who have previously damaged their medial cartilage. The major predisposing factor is generating too much medial stress on the knee by having your toes rotated out during the power phase. This can be because of poor cleat position with too little float, by moving your knee towards the top tube at the top of the stroke or by pronation of the foot during the power stroke forcing the tibia to rotate during the stroke. Can be common among women whose wider hips force a greater angle at the knee.

CAUSES:

Incorrect cleat position - foot held externally rotated (toes pointed out)
Excessive knee frontal plane motion
Too little pedal float
Excessive pronation: consider orthotics*