I am pretty sure that there was another thread on this topic where the sources were discussed.
In short (no pun intended), covering until the knee is a gemara in Brochos and is required regardless of what people do (although a poster last time disputed this). Wearing pants or tights above the knee (and not covering it with a skirt) is a matter of Das Yehudis. This means the tznius standards of the frum women in your community.