Don't give up on squats! You'll never find a better exercise. Here's a couple tips that I've given to many people.
1) Practice on a wall. Toe up to a wall about 1-3 inches from the wall and squat. If your knees or face are dragging the wall, you you know you need to sit back a bit more.
2) You can also toe up to a bench. This allows you a slight forward lean, but will keep your knees from going past your toes.
3) Let your hips be the first movement back. Alot of new squatters bend their knees first without moving their hips. This forces your knees out over your toes and makes it nearly impossible to get good depth. Again, sit back and let your butt move back first then bend your knees to squat down.
It's really hard to describe such a complex movement on here, but I hope those tips will keep you motivated for squats. Give them a try and feel free to ask any questions.