Bad knees? Absolutely not. Insanity is not for you. At all.
Insanity lives up to its name. It is sixty days of extreme plyometrics. Your joints, your knees, your Achilles tendons will take a beating with all that jump, jump, jumping for fifty minutes. Unless you're already in excellent physical condition, I'd stay clear of Insanity.
That said, if you're set on doing Insanity, go halfway. Do a P90X-Insanity hybrid. The P90X Plyometrics workout is as hard as anything Insanity has, but some complain that KenpoX and CardioX don't measure up. Fine: substitute an Insanity workout on those days, and keep the P90X resistance training days and YogaX. P90X's Ab Ripper gets a little monotonous three days a week. Solution: Insanity's Core Cardio and Balance or Insane Abs. Insanity really shines with its impact on the abs.
P90X is tough but doable; Insanity is, in my experience, too much for an older body (I'm 43) to handle for two straight months. P90X is also easier to modify than Insanity, both during each workout ("Watch Pam the Blam for the modified moves!") and each workout as a whole. Ninety days is a tough stretch, but I find that as long as you keep the core components -- three days of resistance and one day of YogaX, Plyo, or Core Synergistics -- you'll have a good foundation to add or subtract Insanity workouts as needed.