Are there upright internal forms?

Any of those will be fine as I think someone has already said at beginner level you start more upright and get deeper as you progress. I have had knee injuries from football and these arts have helped me considerably also the internal aspect will help.

Word of caution though make sure you go to a certified instructor of an established style not one of those flowery made up interpretations of a style.

In the Internal Arts, you learn in three stages.

As a beginner, you stand upright. As you advance, your stance gets deeper.

Don't even worry about that. All you have to do is explain this to the teacher. He's not going to make you do something that you medically cannot.

There are, nutritionally, things that you can do to reverse arthritis. But that is up to you.

There is a form of sitting cheng style Tai Chi Quan.

http://www.youtube.com/watch?v=CiuG4HSu2Us

One of the masters was teaming up with a university in Tennessee ( I think) to research such matters.

Tai Chi will probably alleviate your arthritis. You can also try Yiquan.

Or qigong or yoga or pilates.

Chen Style Taijiquan is what ur looking for. It strengthens ur knees over time to get into very deep stances. Good luck

gentle movement of your knee may be better than not bending at all.