If his knees are bad they are not going to get better with rest though some dogs do have the joints freeze up with arthritis so the legs are usable this is usually not the best choice as when they age the knees become a problem.
Do notify the breeder about this issue.
You would have a choice as to the type of surgery done and they vary in cost. Key is finding out which surgery your vet has the best success rate with.
You can read about the problem and the surgeries here
http://www.marvistavet.com/html/body_ruptured_anterior_cruciate_lig.html
TPLO vs Suture repair is an ongoing controversy in the vet world. Some claim they both work or fail at an equal rate some say the TPLO is better. There is a good series of articles on this here
http://www.evidencebasedvet.com/forum/viewtopic.php?t=24
For sure the TPLO is more expensive.
There is a new procedure called the TTA you can read about here
http://www.albemarlevet.com/ and click on the button that says Tibial Tuberosity Advancement (TTA)
For more info on the procedures read on this page
http://www.dcavm.org/01nov.htm
starting at
WHAT'S NEW IN ANTERIOR CRUCIATE LIGAMENT REPAIR?
which says in part
"At the present time there is no surgical technique for management of the cruciate-deficient stifle that has been shown to be unequivocally superior. "
This site has con information on the TPLO
http://home.earthlink.net/~tiggerpoz/id4.html
One issue is that if it fails there isn't much of a next step position while if a suture fails it can be sutured again.
But again it all depends on the surgeon doing the work, if that person's suture patients do not do as well as their TPLO patients then you want the surgery the vet does best.
This site goes over a new experimental procedure in knee replacement
http://www.dispatch.com/live/content/local_news/stories/2009/01/24/dogknee.ART_ART_01-24-09_B1_U3CLM9C.html
Hope this helps you!
Dog Expert:Rescue, Train,Breed,Care
30+ yrs dog home vet care & nursing, rescue, behavior&training, responsible show breeding, genetics