Here is some good info to improve your riding and avoid knee problems
Article from Norco's web site (Link)
Saddle Position is one of those things that is taken for granted by some and remains a mystery to others. Whether you come from column A or B it is always a good time for a refresher. Setting up a proper saddle position is as simple as three basic adjustments. By optimizing the saddle position, you will gain increased power, improved efficiency decreased discomfort. Did you know that back pain, knee pain, shoulder pain and wrist pain can all be attributed to incorrect saddle positioning?
The first aspect of saddle position that we will tackle is height. In order to ride in an optimal position the seat must allow for full extension of the knee. The best way to measure this is by sitting on the bike with your heels placed on the pedals. Although this is not a proper riding position it allows for the isolation of the actual leg length without compensation by the ankle. While sitting on the saddle centered and balanced, pedal backwards; the saddle should be in a position where the leg is fully extended without any rocking of the hips. Once you have found the optimal position, score the seat post with a metal object (unless it is carbon, then use a permanent felt pen to mark the surface).
The second aspect of saddle position is angle. The angle of your saddle has large implications beyond purely comfort itself. A saddle which is angled too far forward will increase the amount of pressure on your hands, wrists and shoulders. A saddle angled too far back will increase reach and create a less than optimal riding position. Correct saddle position is very close to level. A very slight incline or decline can help to relieve pressure in sensitive areas but the saddle itself should be within approximately 2 degrees of being level. If you can not achieve a comfortable position within these guidelines, your saddle may not be right for you. There are many saddles out there with different designs, widths and softness. Ask your local retailer if you can try out a few different saddles before you make up your mind.
The third aspect of saddle position is the fore/aft positioning. This is the forward position of the saddle rails within the seat post. This adjustment will modify both rider position relative to the cockpit and the pedals. In order to correctly make this adjustment you will need a plumb line. A plumb line is a means of measuring a straight vertical line. Position the cranks parallel to the ground and place your feet in riding position. Hold the plumb line at the side of your knee directly behind the knee-cap. This is where the Femur meets the Tibia. (see above image)
From this point the line should fall straight through the pedal axle. From this centralized position, slight modification can be made. Shifting backwards will move the knee behind the pedal axle and utilize increased quadriceps. Moving the knee in front of the axle will further utilize the hamstrings.