Runner's Knee during C25K - HELP!

Hello all! I just finished week two of the couch to 5k running program and am at a total loss. I started having knee pain after week one. Really bad knee pain! I took a class at Playmakers and learned I was running wrong and that my shoes weren't right for my feet. I fixed all of that, but the program requires running 3x a week to maintain the right progression. I have a running buddy who I go with who is doing great at keeping up with the program, but my knee pain is not going away and I end up jogging at the same pace as my walking is. It hurts so bad! I've read conflicting advice on what I should do. Should I rest my knees until they feel 100% better before trying the program again, even though that means I am jumping into a more difficult week after not running for awhile? Or should I continue to try to do the C25K workouts through the pain? Is it making my knees worse by doing so? Or should I do something in between, such as walking a 5k on my days off to keep my knees loose (they tighten and hurt more the more inactive I am). I'm already taking Motrin, which is all I can do because I nurse, and am icing my knees throughout the day. Please help!!!! I feel so out of control of my own body! I REALLY want to stick with this program since I did so well the first week, but I don't know what's best!