Good news: no new injury.
Bad news: Martinez has a condition that's not going away. He'll have to manage the arthritis for the rest of his baseball career and beyond. There is no cure.
Likely, it was brought on by the cartilage problems he's had in the last year since arthritis is essentially the absence of cartilage where the bones grind against each other.
About.com points out that patients with knee arthritis "report good months and bad months, or symptoms that fluctuate with the weather."
Martinez hasn't played a full season in any of his five years as a professional. The arthritis won't make it any easier on him to make it through a year. The repetitive motions baseball demands, combined with the extra work players go through as they learn the learn the game and develop will put continuous pressure on the knee.
On the field, arthritis should hurt Martinez's speed. This will only hasten a permanent move to a corner outfield spot and remove centerfield from his bag of tricks. He was never a burner, but he should lose his speed more quickly than the average player, hurting both his short and long term value.
I will certainly take the arthritis diagnosis into account when it comes to ranking Fernando Martinez this year and it will damage his ranking.
Wikipedia has some good further reading on arthritis: http://en.wikipedia.org/wiki/Knee_arthritis