No, its more than a verbal committment. Knight signed a financial aid offer with UK, instead of the LOI. Meaning, he has committed himself to attend the University of Kentucky and has been accepted (and will accept aid from UK in the form of a scholarship), but not bound by the LOI to play basketball at that one school. Its obviously easier to get out of than an LOI, but its not like a verbal where you can just walk out for no reason. Basically, Knight found the loophole. (one that will probably soon dissapear). Obviously once he bounces the first ball, it will be in concrete like any other player.
what it comes down to (between the LOI and the Financial aid offer), is that should Knight decide that UK is not the place to play (as he might if Cal left for the NBA), he can have more wiggle room to get his release.
Another big point of emphasis, is that the financial aid offer states that he cannot receive financial aid from an SEC school within the next two years. (i.e a scholarship)
Does this help clear it up? or are you more confused?