Everything I could find about the tradition said something similar to this:
The custom of proposing on one knee hearkens back to the days of knighthood and chivalry when it was customary for a knight to dip his knee in a show of servitude to his mistress and his master. The knight would kneel before a tournament and wait for “his” lady to toss him her ribbon or colors, as an indication of her favor. (source)
My husband got down on one knee when he proposed. We were in our hotel room, preparing to get married (we had made plans to elope because of him being away with the Army at the time and all of our planning had been over the phone). I never expected a traditional proposal or to get an engagement ring. I was completely caught off guard with it and very pleasant surprised. We got married about 2 hours later as planned.