When I went in for my medical, they did ask me to jump around a bit (the doctor didn't really say why--I've gathered from forums/blogs it was to assess if I had neck or back problems?) so if they ask you to do this and it's something that could irritate your knee, just mention that you've had the knee injury. No running on a treadmill, though.
The injury, and lack of fitness, won't count against you. They're really looking for health issues that have a long-term cost for Australia, both in money and resources.