He is going to start playing again on 27 December 2012 - so, just a week from today - so obviously he is a lot better, but he has been off the sport for 7 months and has said that he is rather nervous about his first event after so long. According to a recent interview, his doctors have assured him that he is fit to play and he is going to try, but naturally he is a bit concerned.
It isn't surprising though, if he feels he has to be very cautious. Despite his great achievements, Nadal's career has been dogged by injury and problems for a long time. He had to stop playing in June this year due to tendinitis, so his hopes both for Wmbledon and for the Olympics were disappointed. He also had to miss some major team events, and this was by no means the first time he suffered problems.
He has said he will limit the amount of his playing at first in 2013, but his knee has definitely been better in the last two months, so he - and his fans - should be hopeful.