let me clarify, i'm not trying to say that bouncing is absolutely going to cause injury to the knees if done over time. sorry for phrasing it that way.
however, when people get dependent on the stretch reflex, i've often noticed that trainees 'loosen' up in the bottom of the exercise and don't maintain proper stability in the hole.
that being said, if you're 'loose' in the bottom of the squat you're really placing all of the torque on the joints and not allowing the supporting musculature to stabilize the resitstance on the body. this often causes injuries over time.
same thing is true for those people who bounce out of bench, dips, military press, etc....
however, if stability is maintained throughout the ENTIRE exercise, and in the bottom of the exercise while 'bouncing' and using the stretch reflex, the risk factors for injuries are minimized big time.
i'll be back in a bit.... i'll link some good sites on the mechanics of the squat.
btw, i personally always bounce out of the bottom with squats and front squats.
but i keep my glutes, hips, and abdominals tight when i squat. 99/100 guys who bounce just go loose at the bottom and pray that they 'catch' the lift on the way up.