There are inclines that will make it difficult to navigate with knee problems however you can avoid those however it is possible to avoid the inclines. You probably will not want to walk the Governors promenade as it has many steps from the Port. There is an entry at the opposite end of the Old Town as well however I would think it will still be difficult to walk. The remainder of the Old Town is easy to walk. You will be able to walk Rue St. Jean without difficulty and walk to the Port. Frommers has a couple of walking tours which should be fairly easy for you to do. Where is the B and B your staying at?

If you are going to go to the Lower Town there is a funicular and most of the lower town is easy to navigate. There is a nice street to the right of the funicular in lower town with some nice shops, restaurants and cafes.

Thanks so much. Am staying at Chez Hubert on Rue St Ursule

Very nice location! You should be able to manage walking around this entire area without difficulty. You will want to walk up St. Jean. There are benches at the port in front of the Chateau to rest. There are often street musicians in this area as well. A nice thing to do would be to take a carriage ride. There is a fun restaurant near there called Restaurant Parmesan. It is pricey though. Some of the restaurants on Rue St. Jean are less expensive. You will enjoy Quebec City.