I just love squats! They are my favorite exercise... I'm sure I blogged about them before, but I came across this awesome post on another fitness blog that I just had to share: 1,000,000,001 Different Ways to Squat.
Squats will work out pretty much your entire body once you add weights to them. Your biceps, delts, abs and other core muscle, lower back, upper back, middle back, quads, hamstrings, calf muscles... Seriously, it is the best total body workout ever created.
Will it mess up your knees? No! Learn to do it right. Learn to do it well. Watch videos on proper squat form and practice while looking in the mirror. Do NOT sacrifice your form just so that you can add weight. If you're doing 160 lbs while wobbling around, letting your butt "wink", etc., you're not really squatting 160 lbs. You're just being careless.