Running shouldn't hurt your knees. If it does, then there is something wrong. It's either a medical condition or your form. My old track coach used to scream at some people "BEND THOSE KNEES!" Some people don't kick their feet high enough with control, or pump those arms correctly.
Back on the subject of weight loss, walking a mile a day is sort of meh. I mean, if you weigh a lot and it's a hot day, then it should do a little help. But if it is easy, then you're not trying hard enough. Going back to quotes from my old track coach, "If it's not hard, then MAKE IT HARD!" Shoot for 5 miles. Once you can walk 5 miles with relative ease, shoot for 10 miles. You never know what you can do until you try. Maybe you'll lose weight faster with more milage and it'll still be easy.