wobblylegs,
You do not give your age, but it sounds as though you may have some sort of problem with the patellofemoral joint. You are having discomfort under the patella (kneecap) when it is stressed (walking up stairs, act of sitting). This joint is a common area for the development of degenerative joint changes.
It is usually recommended that the quadriceps muscles be kept very strong, especially the VMO (vastus medialis oblique). This is best done with quad sets, straight leg raises, and short arc quads.
A neoprene sleeve is often helpful for the discomfort around the patella. Some patients prefer the ones with the cutout for the patella, but mostly just get one that feels comfortable. You do not need the heavy expensive braces, with metal uprights, that are used for ligament damage. Just one that will provide some warmth and a little support.
If you can take them, antiinflammatory medication can some times help, but you have to watch your stomach.
Try to avoid activities that really bother the knee, such as squatting or sitting with the knees bent for long periods of time.
Some patients will ice the knee before and after periods of activity (like therapy sessions) or whenever it is bothering them. While others prefer to use heat, as it is more soothing.
If these actions do not make the knee feel significantly better, or it is getting worse, you should see an orthopedic surgeon for an evaluation.
As for the granuloma anularies, about the only treatment that is recommended is the use of topical steroid cream, such as clobetasol or methylprednisolone. Sometimes, triamcinolone can be injected to get them to resolve.
You should see a dermatologist for an evaluation and treatment of the skin condition.
Good luck.