Hi Lisal,
this does sound like a lateral release. I just had it done on my left knee two weeks ago for the same reason. It's a fairly common surgery for patellar tilt and can be very effective in correcting it, especially for people like you and me, whose alignment is only off by a small amount. This is what it involves:
The patella is held in place by the lateral retinaculum on the outer side of the leg and by the VMO tendon on the inner side. The pull from each of these needs to be equal for the kneecap to sit correctly in its groove. In a lot of people, the LR tends to be stronger and tighter, so it pulls harder on the patella, resulting in patellar tilt. In a lateral retinacular release, the OS makes a shallow cut in the top layer of the tendon. This releases the tension on it and allows the VMO to pull the kneecap into its proper position. The hope is that the cut surface will fill in with scar tissue and the two tendons will be more balanced. For this to happen, however, you have to be diligent about following your post-op PT protocol, which should involve exercises to strengthen the VMO and maintain flexibility during the healing process.
There's a good tutorial about the procedure on the kneeguru's home page if you want to read more about it. Hope this was helpful. Any time you want to compare notes, just let me know.
Terre