My knees are sensitive too while riding and found a taller seat helped a lot for me. Going from sitting to standing with a stock seat caused too much stress on my knees.
A good ointment that I use on sore knees, hands, feet, etc.. is called "Blue Emu". It comes in a round container and is blue in color. The emu oil helps the ointment soak in quickly and it provides good pain relief. It's odorless and doesn't get hot like other creams.
Here is more info on Blue Emu:
http://www.blue-emu.com/why_blueemu.html
According to their site:
It contains two key ingredients: Glucosamine and MSM (Methyl Sulfonyl Methane)... two of the most widely used natural supplements for pain relief, inflammation and tissue repair. Emu oil is the transport mechanism that delivers these repair components directly to the source of your pain.