His running abilities are similar to Shonn's and he is a much better receiver, so it'd be an upgrade in theory. But if he can play, why would the skins have cut him?
I def don't know what the status of his knee is, but Evan Royster had a good camp, as did Alfredo Morris, and they also have Roy Helu, who Shanny was high on last year. All three are younger and I believe cheaper. This might be more of an economic move than a football move.
He had to pass a NFL regimented physical to get on the field to begin with. There was never any mention that he hurt it again during camp so his knee has to be at least good enough for that.