I don't trust any of the machine readouts either!
The best way to determine which machine burns the most calories is to compare your heart rate while you're on the treadmill with your heart rate on the elliptical. If they're comparable, you're burning about the same number of calories per hour, regardless of what the machine says. Your heart rate determines your calories burned.
You can do this with a heart rate monitor that you wear or one built into the machine. One you wear is a great choice because you can program it with your own personal statistics: age, gender, weight etc. I have a Polar one and love it because it syncs up with the displays on the machines in my gym.
I remember reading a study that found that the elliptical is perceived as not being as hard of a workout as it actually is -- people didn't think they were working as hard as they actually were. I'm an elliptical user myself and think it's awesome cardio!
I think you're really smart to think about the long-term effect of the treadmill on your knees. If you have knee issues, you could also add swimming and biking into your cardio program and still protect your knees. Mix them all up and have fun! (and don't forget music!

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