No, a knee replacement is not the only option for bone on bone in your knee. The other option is a knee fusion which fuses the tibia to the femur. Since this procedure will eliminate the knee joint and cause a total loss of joint motion, the procedure is rarely done except in cases of infection, trauma or when a total knee is not indicated.
If the bone on bone is limited to one area of the knee, a partial knee replacement can be done. A viscosupplementation is also an option from a non-surgical standpoint, with an improvement seen in about 50% of patients.