My knees aren't straight!

[The Ken]

I had 10 weeks of physio for mine a few years back - ended up with a list of 23 exercises to do each day.
I don't use spuds for that reason - buys some flatties for a while. Body Geometry shoes helped fix mine - (or similar insoles).

 

[Rich Aitch]

I had a similar problem from cycling into work on my road bike, no SPD's there I had toe clips and have had no probs since I gave them up but then as you ripped your toe-clips off at the cake run you've probably reached the same conclusion.
Have you thought about Biopace chain rings? Sheldon Brown- hallowed be His name- http://www.sheldonbrown.com/biopace.html -says that as they are dynamically rather than statically balanced they reduce knee speed during the bit where your knees are changing direction.
I'm fussy about getting foot/ saddle set up right because I've got one leg longer than the other. I find they make a massive difference, although big chain ring road riding does create a kind of "Surging" feeling which is a bit weird until you get used to it.