My knee feel weird (no pain). What is wrong?

I don't exercise very much (so its not an athletic injury). It feels as though there is extra tissue just below the kneecap. I get the sensation as though I'm wearing tight pants that have been stretched over my knee (when I am wearing loose fitting clothing). My kneecap can be moved from side to side about half a centimeter. I'm starting to develop pain in my hip because I am adjusting for the weird knee when I walk. Anybody know what this could be and what I should do for relief?