Getting Started on fitness - best approach?

Hello. Alittle about me before my question:

I'm a long time attempter but I've never stuck with any programs before. I'm really trying to get serious this time. I bought a fitness/food log book, I'm tracking everything I eat, and Ive been going to the gym twice a week for three weeks. My fitness level is very low when it comes to strength, about a medium for walking (I walk a lot on a daily basis), and very low for any other cardio. I cannot run or do many cardio activities due to deteriorating knees. Lunges are basically impossible for me, but I can usually handle squats. My goals are to lose weight (of course) and to improve my overall fitness so i can do the active things I like but currently cant handle (hiking, kayaking, backpacking, etc). And I want to strengthen my legs so my knees deteriorate less quickly (or reverse the process if thats possible). I'm 27 yrs old and 5'6 170lbs.

So my question is what is the best way for me to really go about improving my overall fitness while I lose weight? I have read lots of blogs and things that say heavy lifting is ideal, but can I just jump into that or should I work on the basics of moving my body and then build up to weights? Do you recommend any websites or resources to help me find my way?

An example routine I did the other day was 2 sets of planks (20 sec), 10 squats, 7 assisted chin ups, 10lb/10 dumbell deadlifts, and 7.5lb/10 shoulder press. That was like the max I could do on all those exercises. I'm guessing that I would be considered a low-level beginner. I'm using a plan from the Women's Health big book of exercises, with alternating A and B days that are total body each time. I didn't really know where to start, so I just picked something that sounded simple to just get my foot in the door.