What do you mean by "bad knees"? Arthritis? Undiagnosed knee pain? And in whose opinion are lunges and squats a no-no for you? Yourself? A physical therapist or doctor? If you haven't, get those knees checked out by a PT. Exercise can actually help reduce knee pain by strengthing the muscles around the knee. A PT will be able to tell you which muscles need strengthening and give you specific exercises to do so.
What is the problem when you try to do "extended cardio"? Do all types of cardio bother your knees? Some of the torquier moves in Cathe's step workouts can bother my knees, so I have modified most 180-turn moves and pivots (and most definitely avoid ricochets like the plague: turning over the step at that speed makes the risk of knee torque quite high for me).
Can you do kickboxing? Workouts like Powerstrike, Cathe's KPC and other more kickbox-oriented workouts are usually low impact (or can be made to be so), but are very intense.
Some people find that biking is easier on their knees(stationary or other).
I haven't done Boot camp for a while: is there an "upper body and cardio" premix on it? Then you wouldn't have to switch DVD's. Or just chapter forward on your DVD to do just the cardio and upper body segments. I agree that changing between PS and Boot Camp is a lt of DVD changing if you have a single disc DVD player, especially since it will effect your cardio intensity (as in lower it because of all the pauses).
Water aerobics could be a way of getting a high intensity cardio workout with some resistance benefits, while sparing your knees.