My intuition says that a bench about knee high with someway to hold
planks down would be perfect for planing and not take up a lot of
room. Perfect to complement my current imperfect bench.

I'm having a hard time seeing how having a bench "knee high" would do
anything but screw up your back and quickly wear you out from using it. I
do agree that for hand planing, you need a slightly different approach to
bench height than if you're planning to use it in other ways. The rule of
thumb I've always heard (and followed when I built my bench) is to stand
with your hands at your sides, and then turn your hands out at the wrists
with the palms down. The bench height should be at this height, so you
would be able to put your palms flat on the surface.

Keep in mind (as I've discovered), that there are several hand tool
operations that this height seems less than ideal for. Namely, when I cut
dovetails by hand, I almost constantly wish I had a taller bench. That's
when I discovered that some people have so-called "dovetailing benches". It
never ends.

So, to reiterate, I'm still a little confused as to how exactly a knee high
bench would do you any good for hand planing purposes.

Mike