You gotta go to the games! Madison Square Garden is the best arena in pro sports, and you're going to travel to NYC only to watch the game on a 13" tv in some bar?
I'm telling you, the $10 tickets in MSG are better than $35 tickets almost anywhere else. If you know what dates you'll be in town, ask around on some Knicks message boards for information on how to buy tickets during the presale that should be coming up soon. You can get yourself some $10 seats and enjoy the game in style.
I've only been to ESPN once to watch a football game... do they show non-ESPN channels there? Most of the Knicks games are on MSG.
Actually I just remembered something - there's a jazz club called Cleopatra's Needle on Broadway around 95th street that has a big projection screen and puts basketball on. There's no cover charge, a reasonable food/drink minimum (maybe $15?) and live jazz.
Brother Jimmy's, Normally I used to go to Irish bars and watch games... Not a sports bar kind of guy normally they're too loud and too many obnxious know it alls! They have some decent bars near MSG and in MSG.
You really should try to scalp tickets to a game. They're easy to find right outside in the covered mall, there's almost never any issues, and for a random, weeknight NBA game, the cost probably won't be much more than you'd spend on booze in a Manhattan bar. My advice would be to try to get tix outside the arena, and if you can't get in, head across the street to the Blarney Stone. It'll be a little dead once the game starts, but the pre and post games' always fun there. There's a few small bars right up that street too if you want to crawl for a bit. And it's a nice area, not too touristy, but not really a residential area. And since it's still right in the middle of the island, it still feels really city-y, if you know what I mean.