An interesting study I read, posted by DoggCrapp, at another board. A few people may benefit from this, so here it is:

2 Ariel, B.G., 1974. Biomechanical analysis of the knee joint during deep knee bends with a heavy load. Biomechanics. IV(1):44-52.

There are several schools of thought on squat depth. Many misinformed individuals caution against squatting below parallel, stating that this is hazardous to the knees. Nothing could be further from the truth. (2) Stopping at or above parallel places direct stress on the knees, whereas a deep squat will transfer the load to the hips,(3) which are capable of handling a greater amount of force than the knees should ever be exposed to. Studies have shown that the squat produces lower peak tibeo-femoral(stress at the knee joint) compressive force than both the leg press and the leg extension.(4) For functional strength, one should descend as deeply as possible, and under control. (yes, certain individuals can squat in a ballistic manner, but they are the exception rather than the rule). The further a lifter descends, the more the hamstrings are recruited, and proper squatting displays nearly twice the hamstring involvement of the leg press or leg extension. (5,6) and as one of the functions of the hamstring is to protect the patella tendon (the primary tendon involved in knee extension) during knee extension through a concurrent firing process, the greatest degree of hamstring recruitment should provide the greatest degree of protection to the knee joint. (7) When one is a powerlifter, the top surface of the legs at the hip joint must descend to a point below the top surface of the legs at the knee joint.

Knee injuries are one of the most commonly stated problems that come from squatting, however, this is usually stated by those who do not know how to squat. A properly performed squat will appropriately load the knee joint, which improves congruity by increasing the compressive forces at the knee joint. (8,(9) which improves stability, protecting the knee against shear forces. As part of a long-term exercise program, the squat, like other exercises, will lead to increased collagen turnover and hypertrophy of ligaments. (10,11) At least one study has shown that international caliber weightlifters and powerlifters experience less clinical or symptomatic arthritis. (12) Other critics of the squat have stated that it decreases the stability of the knees, yet nothing could be further from the truth. Studies have shown that the squat will increase knee stability by reducing joint laxity, as well as decrease anterior-posterior laxity and translation. (13,14) The squat is, in fact, being used as a rehabilitation exercise for many types of knee injuries, including ACL repair. (15)