Is there a Doctor in the house?

[Stabby]

It might be a popliteal cyst.

http://images.google.com/images?q=tb...stepoplite.jpg

Might be best to wrap the knee, maybe ice it down from time to time and rest it. If it persists you might to get fluid drained from it. Occasionaly they need surgery to be removed.

But yours seems small enough and will probably go away on its own..