I can tell you that if she has pre-diabetes - which means a fasting blood sugar between 100-120 (you'd have to have the blood test) means her insulin levels may not be effectively processing sugar.  if she is eating alot of fructose in her diet (that high fructose corn syrup that is in most processed foods) - then we know her liver will easily turn it into fat (that's the one sugar that doesn't get used or stored as glycogen - it almost immediately becomes fat stores).

I'd find a mentor for her - someone close in age who has lost weight - maybe through a pediatrician or adolescent medical doctor or a hospital weight loss program; I'd have someone come in and really clean out your frig/pantry and get her involved in the shopping, looking for recipes, prep.  I'd have someone work with her - not to pressure weight loss - but to make her really get all the health risks - so she does it for her healthj - sometimes removing the only goal of weight loss helps.  In terms of her knee - find a swimming-aerobics class - water based,  maybe at a local Y - with other "overweight people" in the program she may be willing to try it.

Good luck!!