The squat is one of the most comprehensive and functional moves for total body strength and mobility. It can increase joint strength and flexibility, causes the greatest neuro-endocrine response, and has some of the greatest cross over into other movement. However, it can only do all this if you're doing correctly, and most people don't. 1) Squats are bad for your knees 2) You shouldn't go past parallel with the thighs 3) Your knees shouldn't pass the toes
All of these ideas can be attributed to poor technique and poor understanding of what the basic mechanics of the squat are.
Squats are bad for your knees
This idea comes from the fact that most people don't know the importance of doing squats with the weight in your heels. And even if they do know, many people don't know what that feels like and how to attain it. Because of the way most of us move through life today, we're very loaded up on our toes, which feels perfectly natural. However, when you squat this way, you are putting the majority of the work on your quads, neglecting the posterior chain. If you do this consistently, then the imbalances you create will cause knee pain. The longer it goes on, the greater the pain will become.
You get around this by (1) putting your weight back in your heels and (2) getting a good coach or trainer that can spot when you roll onto your toes. By putting your weight in your heels, you activate the posterior chain. Quads can be strong, but the combination of glutes, adductors and hamstrings are stronger, and by working them all together you're creating a balance of strength around the the hip and knee joints. Also, but putting your weight into your heels, and therefore into the hamstrings, you're able to better utilize the stretch reflex at the bottom of your squat, which also frees up tension in the knees.
This one came from a couple of places. First, you're going to see a lot of trainers at box gyms trying to get their clients to squat with their feet hips width apart and toes straight forward. With this set up, half way down is about as far as you can go without putting excess torque on your knees. To correct this, put your heels about shoulder width apart and point your toes slightly out. Hips are meant to rotate in this way.